Microgrid Knowledge began choosing a person of the year in 2019, but we have yet to name an individual, instead making the award conceptual rather than personal, a convention Time magazine sometimes uses. Last year, for example, we chose the home microgrid and before that we selected the state of California.
This year is different because one individual stands out whose actions could significantly drive microgrid adoption. That person is Californian Congressman Jimmy Panetta (D-Carmel Valley).
Panetta is the author of legislation with the acronym MICROGRID, which means Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable and Distributed.
While other lawmakers have introduced bills significant to microgrids, Panetta’s work stands out because the most important element of the MICROGRID Act — a 30% investment tax credit for microgrid controllers — was incorporated into the Build Back Better Act, which is a key piece of President Joe Biden’s agenda. Build Back Better has passed the House and at this writing is just one vote short of approval by the Senate.
Why is the microgrid tax credit so important? One only has to look to the solar industry. Solar grew 10,000% and created hundreds of thousands of jobs after its investment tax credit became law in 2006, according to the Solar Energy Industries Association.
Tax credits as climate change weapons
Panetta, who serves on the House Committee on Ways and Means, explained that climate leaders in Congress are pinpointing clean energy tax credits as a substitute for broad efforts to fight climate change, such as a clean energy standard or carbon tax. Both mechanisms face crippling opposition.
“It’s been up to us on Ways and Means to ensure that there are these tax incentives, be it for e-bikes, for e-buses, for e-cars and yes even microgrids,” Panetta said, speaking at Microgrid California in October. “The tax code is an instrumental part of the Build Back Better plan, the infrastructure plan, and how we approach climate change at this point.”
Build Back Better also creates or extends tax credits for resources often included within microgrids, such as solar, energy storage and electric vehicles, as well as a newcomer, linear generators.
Microgrid grants, especially on the state level, also have helped spur the technology. But Panetta sees tax credits as better able to “open the aperture” to make microgrids affordable for a broad range of organizations, in this case not only businesses, but also government and non-profit organizations.
Panetta came upon microgrids while talking to constituents on the central coast of California who faced wild-fire related power outages.
“Unfortunately, it was because of the effects of climate change that these people then, fortunately, had conversations with me and brought me the idea to support microgrids,” he said.
Although the Build Back Better bill is at the finish line, it’s unclear that it will make it over because of opposition by Sen. Joe Manchin (D-WV). In any case, Congressman Panetta has elevated discussion of the microgrid tax credit and helped spur widespread support, increasing its chances of becoming law, if not this time, then another.
A persuasive advocate
For this work, Microgrid Knowledge names Congressman Jimmy Panetta Microgrid Person of the Year 2021.
Panetta also has served as a persuasive advocate for microgrids in public forums. We invite you to watch his keynote speech at Microgrid California and a panel discussion where he was interviewed by Think Microgrid’s Executive Director, Cameron Brooks.
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