Rep. Panetta Introduces Bipartisan Legislation to Continue Incentivizing the Uptake of Independent Microgrids
Monterey, CA – United States Representative Jimmy Panetta (CA-19) authored and introduced the bipartisan Making Imperiled Communities Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable, and Distributed (MICROGRID) Extension Act. This legislation would extend the Inflation Reduction Act investment tax credit (ITC) for microgrid controllers by another eight years. Rep. Panetta introduced the bill with Claudia Tenney (NY-24), who together also recently introduced the Technologies for Energy Security Act to extend the tax credits for fuel cells and linear generators.
As part of the Inflation Reduction Act, Rep. Panetta passed into law provisions to incentivize the expansion and deployment of microgrids, which provide backup power independent from the larger energy grid during emergencies. Rep. Panetta’s law provides a 30 percent tax credit for a qualifying microgrid property through 2025. This new legislation would extend the credit available for microgrid controllers to 2033.
“The extreme weather conditions that hit California’s 19th Congressional District this year have underscored the need to accelerate the adoption of independent energy grids that will keep the lights on when the larger grid fails,” said Rep. Panetta. “My bipartisan legislation extends the tax credit, which I passed into law last Congress, that’s already shown incredible progress toward building out innovative, clean microgrid technology throughout our communities and the country. By ensuring that the incentives are extended, we can ensure that more microgrids are available to keep our homes and critical infrastructure connected to clean and reliable energy.”
The U.S. Energy Department estimated that there were more than 450 operational microgrids in the United States in 2022. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or “island mode,” meaning independent from the grid. The California Public Utilities Commission, for one, recently approved a $200 million program to bring community microgrids to disadvantaged and tribal communities that are vulnerable to power outages.
As extreme weather events, such as wildfires, become increasingly common, microgrids can mitigate the impacts of grid outages and public safety power shutoffs on communities using cleaner energy sources.
“With grid outages becoming increasingly common due to extreme weather and other disruptive events, microgrids provide businesses, communities and the critical infrastructure that supports them, with a cost-effective source of reliable power and resilience,” said the Microgrid Resources Coalition Executive Director Pierson Stoecklein. “Uniquely flexible, microgrids can deliver valuable services to the grid even during times of normal operation, for example, by firming the increasing supply of intermittent renewable electricity delivered onto the grid or by displacing the most expensive and oldest resources, thereby cutting costs for all customers. The MICROGRID Act will provide essential certainty and enable continued growth of the industry while the parameters governing transition to a technology-neutral energy tax regime are being developed. The Microgrid Resources Coalition applauds Representatives Panetta and Tenney for their bipartisan leadership.”
“GreenStruxure is proud to support The Microgrid Act. The Act will extend tax benefits to microgrid equipment which will enable development of more advanced systems and enhance typical renewable energy projects with capabilities for power backup during times of utility grid interruption,” said Greenstruxure CEO Jose Lorenzo Lista. “These capabilities are important to our clients and to the nation’s sustainability and power infrastructure goals. The advanced microgrid systems enabled by the Microgrid Act can help to keep the grid balanced in times of high demand or emergency and can deliver a faster path toward electrification of vehicle and stationary energy as it enables more distributed generation capacity.”
“Scale Microgrids commends Congressman Panetta and the introduction of the MICROGRID Extension Act, a bill that ensures continued tax credit parity for Microgrid Controllers, originally included in the Inflation Reduction Act of 2022,” said Scale Microgrids Chief Investment Officer Julian Torres. “This legislation would give the industry additional runway for successfully deploying microgrids. We are excited to work with Mr. Panetta and other members of the House and Senate to ensure that microgrids are able to grow and expand, further providing cost-effective and resilient solutions for all customers as our energy grid transitions.”
“Power is increasingly expensive, and the grid is facing more reliability challenges than ever before,” said Schneider Electric Vice President of Government Relations Jeannie Salo. “The extension of this important tax credit is critical to continue empowering consumers to take advantage of microgrid technologies that will increase their access to resilient and reliable power in the face of increasing grid failures. We applaud Reps. Panetta and Tenney for their recognition of the importance of microgrids and their action to extend this tax credit on behalf of consumers across America.”
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