Maryland legislation backs growing role for energy storage

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On Monday the legislature in Maryland passed two bills to advance the adoption of energy storage in the state. Senate Bill 758 will establish tax credits for up to 30% of the cost of residential and commercial energy storage systems starting next year, while House Bill 773 will mandate a study of regulatory reforms and incentives to boost storage deployment.

If SB 758 is signed by Governor Hogan, this would be the first time that a U.S. state has created a tax credit for energy storage, although the 30% federal Investment Tax Credit (ITC) can be used in some scenarios to support energy storage as well as PV. And it is not the only state-level subsidy, an approach which is a softer touch than the energy storage mandates which are either in place or being developed in California, Oregon and Massachusetts.

The measure is clearly designed as a limited kick-start for distributed storage. The 30% credit created under SB 758 would last only five years, from 2018 through the end of 2022, with an annual overall cap of $750,000. As such, the Energy Storage Association, which testified in favor of the bill, says that it expects the bill to directly support “more than” 10 megawatt-hours of customer-sited energy storage. This is a relatively modest amount, but enough to get the market moving.

Maryland Governor Larry Hogan has not been friend to renewable energy, however the state’s legislature has shown that it is capable of acting on its own if need be, as when it overrode the governor’s veto of the Clean Energy Jobs Act. And as both SB 758 and HB 773 passed by wide majorities, the possibility of another veto is not a potent threat.

Concurrent with these efforts, Maryland regulators are preparing to convene a working group on the valuation of distributed energy storage.