Biden’s New Climate Framework Retains Microgrid Tax Credit

Oct. 29, 2021
A framework of the Build Back Better bill released by President Joe Biden this week retains a 30% tax credit for microgrid controllers.

A framework of the Build Back Better bill released by President Joe Biden this week retains a 30% tax credit for microgrid controllers.

The credit was initially proposed by California Congressman Jimmy Panetta, D-Carmel Valley, as part of the MICROGRID Act.

The microgrid provisions are included in a larger climate framework that makes a series of investments in clean energy.

If the framework wins Congressional support, it will offer the full credit to microgrid projects that begin construction by Jan. 1, 2027, and meet prevailing wage and apprenticeship standards. It applies to projects that are 4 kW to no more than 20 MW.

Biden released the framework, a scaled down version of his original climate proposal, Thursday after weeks of struggle to negotiate terms with conflicting factions in the Democratic party.

The new language continues to champion solar and energy storage, providing a tax credit that would cut the cost of installing rooftop solar for a home by around 30%, shortening the payback period by about five years, according to information released by the White House. 

The White House said the framework also would:

  • Lower the cost of American-made electric vehicles, via a tax credit, by $12,500 for a middle-class family.
  • Provide clean energy grants and loans to rural communities. 
  • Fund port electrification.
  • Facilitate the deployment of cleaner transit, buses and trucks.
  • Offer grants to environmental justice communities.

A clean energy standard for utilities was dropped from the bill, following opposition from Sen. Joe Manchin of West Virginia over the cost of the provision.

Despite the loss of the clean energy standard, the framework won widespread support from environmental and clean energy groups.

“The proposed Build Back Better framework would be a game changer in tackling the climate crisis,” said Lisa Frank, Washington legislative office executive director for Environment America. It clears the way for our country to more easily tap abundant clean energy from the sun and wind and will usher in a decade of clean energy growth by making renewables less expensive for consumers and businesses.

Track news about the microgrid tax credit. Subscribe to the free Microgrid Knowledge Newsletter.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

Twitter: @ElisaWood

LinkedIn: Elisa Wood

Facebook:  Microgrids

Exploring the Potential of Community Microgrids Through Three Innovative Case Studies

April 8, 2024
Community microgrids represent a burgeoning solution to meet the energy needs of localized areas and regions. These microgrids are clusters of interconnected energy resources,...

MGK_SchneiderWPCover_2021-10-13_9-43-09

Linking Clean Energy and Clean Mobility via Resilient Microgrids

Resilient microgrids and energy as a service (EaaS) business models can help to support grid assets by linking renewables, EVs, and advanced software systems to provide real time...