I 

112TH CONGRESS 

2D SESSION H. R. 4096 

To amend the Internal Revenue Code of 1986 to provide for an energy 

investment credit for energy storage property connected to the grid, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2012 

Mr. GIBSON (for himself and Mr. THOMPSON of California) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for an energy investment credit for energy storage property connected to the grid, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Storage Technology 

5 for Renewable and Green Energy Act of 2012’’ or the 

6 ‘‘STORAGE 2012 Act’’. 


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1 SEC. 2. ENERGY INVESTMENT CREDIT FOR ENERGY STOR2 AGE PROPERTY CONNECTED TO THE GRID. 

3 (a) UP TO 20 PERCENT CREDIT ALLOWED.—Sub4 paragraph (A) of section 48(a)(2) of the Internal Revenue 

5 Code of 1986 is amended— 

6 (1) by striking ‘‘and’’ at the end of subclause 

7 (IV) of clause (i), 

8 (2) by striking ‘‘clause (i)’’ in clause (ii) and in9 serting ‘‘clause (i) or (ii)’’, 

10 (3) by redesignating clause (ii) as clause (iii), 

11 and 

12 (4) by inserting after clause (i) the following 

13 new clause: 

14 ‘‘(ii) as provided in subsection 

15 (c)(5)(D), up to 20 percent in the case of 

16 qualified energy storage property, and’’. 

17 (b) QUALIFIED ENERGY STORAGE PROPERTY.—Sub18 section (c) of section 48 of the Internal Revenue Code of 

19 1986 is amended by adding at the end the following new 

20 paragraph: 

21 ‘‘(5) QUALIFIED ENERGY STORAGE PROP22 ERTY.— 

23 ‘‘(A) IN GENERAL.—The term ‘qualified 

24 energy storage property’ means property— 

25 ‘‘(i) which is directly connected to the 

26 electrical grid, and 


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1 ‘‘(ii) which is designed to receive elec2 trical energy, to store such energy, and— 

3 ‘‘(I) to convert such energy to 

4 electricity and deliver such electricity 

5 for sale, or 

6 ‘‘(II) to use such energy to pro7 vide improved reliability or economic 

8 benefits to the grid. 

9 Such term may include hydroelectric pumped 

10 storage and compressed air energy storage, re11 generative fuel cells, batteries, superconducting 

12 magnetic energy storage, flywheels, thermal en13 ergy storage systems, and hydrogen storage, or 

14 combination thereof, or any other technologies 

15 as the Secretary, in consultation with the Sec16 retary of Energy, shall determine. 

17 ‘‘(B) MINIMUM CAPACITY.—The term 

18 ‘qualified energy storage property’ shall not in19 clude any property unless such property in ag20 gregate has the ability to sustain a power rat21 ing of at least 1 megawatt for a minimum of 

22 1 hour. 

23 ‘‘(C) ELECTRICAL GRID.—The term ‘elec24 trical grid’ means the system of generators, 


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1 transmission lines, and distribution facilities 

2 which— 

3 ‘‘(i) are under the jurisdiction of the 

4 Federal Energy Regulatory Commission or 

5 State public utility commissions, or 

6 ‘‘(ii) are owned by— 

7 ‘‘(I) the Federal government, 

8 ‘‘(II) a State or any political sub9 division of a State, 

10 ‘‘(III) an electric cooperative that 

11 is eligible for financing under the 

12 Rural Electrification Act of 1936 (7 

13 U.S.C. 901 et seq.), or 

14 ‘‘(IV) any agency, authority, or 

15 instrumentality of any one or more of 

16 the entities described in subclause (I) 

17 or (II), or any corporation which is 

18 wholly owned, directly or indirectly, by 

19 any one or more of such entities. 

20 ‘‘(D) ALLOCATION OF CREDITS.— 

21 ‘‘(i) IN GENERAL.—In the case of 

22 qualified energy storage property placed in 

23 service during the taxable year, the credit 

24 otherwise determined under subsection (a) 

25 for such year with respect to such property 


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1 shall not exceed the amount allocated to 

2 such project under clause (ii). 

3 ‘‘(ii) NATIONAL LIMITATION AND AL4 LOCATION.—There is a qualified energy 

5 storage property investment credit limita6 tion of $1,500,000,000. Such limitation 

7 shall be allocated by the Secretary among 

8 qualified energy storage property projects 

9 selected by the Secretary, in consultation 

10 with the Secretary of Energy, for taxable 

11 years beginning after the date of the enact12 ment of the STORAGE 2012 Act, except 

13 that not more than $40,000,000 shall be 

14 allocated to any project for all such taxable 

15 years. 

16 ‘‘(iii) SELECTION CRITERIA.—In mak17 ing allocations under clause (ii), the Sec18 retary, in consultation with the Secretary 

19 of Energy, shall select only those projects 

20 which have a reasonable expectation of 

21 commercial viability, select projects rep22 resenting a variety of technologies, applica23 tions, and project sizes, and give priority 

24 to projects which— 


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1 ‘‘(I) provide the greatest increase 

2 in reliability or the greatest economic 

3 benefit, 

4 ‘‘(II) enable the greatest im5 provement in integration of renewable 

6 resources into the grid, or 

7 ‘‘(III) enable the greatest in8 crease in efficiency in operation of the 

9 grid. 

10 ‘‘(iv) DEADLINES.— 

11 ‘‘(I) IN GENERAL.—If a project 

12 which receives an allocation under 

13 clause (ii) is not placed in service 

14 within 2 years after the date of such 

15 allocation, such allocation shall be in16 valid. 

17 ‘‘(II) SPECIAL RULE FOR HYDRO18 ELECTRIC PUMPED STORAGE.—Not19 withstanding subclause (I), in the case 

20 of a hydroelectric pumped storage 

21 project, if such project has not re22 ceived such permits or licenses as are 

23 determined necessary by the Sec24 retary, in consultation with the Sec25 retary of Energy, within 3 years after 


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1 the date of such allocation, begun con2 struction within 5 years after the date 

3 of such allocation, and been placed in 

4 service within 8 years after the date 

5 of such allocation, such allocation 

6 shall be invalid. 

7 ‘‘(III) SPECIAL RULE FOR COM8 PRESSED AIR ENERGY STORAGE.— 

9 Notwithstanding subclause (I), in the 

10 case of a compressed air energy stor11 age project, if such project has not 

12 begun construction within 3 years 

13 after the date of the allocation and 

14 been placed in service within 5 years 

15 after the date of such allocation, such 

16 allocation shall be invalid. 

17 ‘‘(IV) EXCEPTIONS.—The Sec18 retary may extend the 2-year period 

19 in subclause (I) or the periods de20 scribed in subclauses (II) and (III) on 

21 a project-by-project basis if the Sec22 retary, in consultation with the Sec23 retary of Energy, determines that 

24 there has been a good faith effort to 

25 begin construction or to place the 


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1 project in service, whichever is appli2 cable, and that any delay is caused by 

3 factors not in the taxpayer’s control. 

4 ‘‘(E) REVIEW AND REDISTRIBUTION.— 

5 ‘‘(i) REVIEW.—Not later than 4 years 

6 after the date of the enactment of the 

7 STORAGE 2012 Act, the Secretary shall 

8 review the credits allocated under subpara9 graph (D) as of the date of such review. 

10 ‘‘(ii) REDISTRIBUTION.—Upon the re11 view described in clause (i), the Secretary 

12 may reallocate credits allocated under sub13 paragraph (D) if the Secretary determines 

14 that— 

15 ‘‘(I) there is an insufficient quan16 tity of qualifying applications for cer17 tification pending at the time of the 

18 review, or 

19 ‘‘(II) any allocation made under 

20 subparagraph (D)(ii) has been re21 voked pursuant to subparagraph 

22 (D)(iv) because the project subject to 

23 such allocation has been delayed. 

24 ‘‘(F) DISCLOSURE OF ALLOCATIONS.—The 

25 Secretary shall, upon making an allocation 


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1 under subparagraph (D)(ii), publicly disclose 

2 the identity of the applicant, the location of the 

3 project, and the amount of the credit with re4 spect to such applicant. 

5 ‘‘(G) TERMINATION.—No credit shall be 

6 allocated under subparagraph (D) for any pe7 riod ending after December 31, 2020.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to periods after the date of the 

10 enactment of this Act, under rules similar to the rules of 

11 section 48(m) of the Internal Revenue Code of 1986 (as 

12 in effect on the day before the date of the enactment of 

13 the Revenue Reconciliation Act of 1990). 

14 SEC. 3. ENERGY STORAGE PROPERTY CONNECTED TO THE 

15 GRID ELIGIBLE FOR NEW CLEAN RENEWABLE 

16 ENERGY BONDS. 

17 (a) IN GENERAL.—Paragraph (1) of section 54C(d) 

18 of the Internal Revenue Code of 1986 is amended to read 

19 as follows: 

20 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL21 ITY.—The term ‘qualified renewable energy facility’ 

22 means a facility which is— 

23 ‘‘(A)(i) a qualified facility (as determined 

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1 graphs (8) and (10) thereof and to any placed 

2 in service date), or 

3 ‘‘(ii) a qualified energy storage property 

4 (as defined in section 48(c)(5)), and 

5 ‘‘(B) owned by a public power provider, a 

6 governmental body, or a cooperative electric 

7 company.’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to obligations issued after the date 

10 of the enactment of this Act. 

11 SEC. 4. ENERGY INVESTMENT CREDIT FOR ONSITE ENERGY 

12 STORAGE. 

13 (a) CREDIT ALLOWED.—Clause (i) of section 

14 48(a)(2)(A) of the Internal Revenue Code of 1986, as 

15 amended by this Act, is amended— 

16 (1) by striking ‘‘and’’ at the end of subclause 

17 (III), 

18 (2) by inserting ‘‘and’’ at the end of subclause 

19 (IV), and 

20 (3) by adding at the end the following new sub21 clause: 

22 ‘‘(V) qualified onsite energy stor23 age property,’’. 

24 (b) QUALIFIED ONSITE ENERGY STORAGE PROP25 ERTY.—Subsection (c) of section 48 of the Internal RevVerDate Mar 15 2010 23:42 Feb 28, 2012 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4096.IH H4096

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1 enue Code of 1986, as amended by this Act, is amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(6) QUALIFIED ONSITE ENERGY STORAGE

4 PROPERTY.— 

5 ‘‘(A) IN GENERAL.—The term ‘qualified 

6 onsite energy storage property’ means property 

7 which— 

8 ‘‘(i) provides supplemental energy to 

9 reduce peak energy requirements primarily 

10 on the same site where the property is lo11 cated, or 

12 ‘‘(ii) is designed and used primarily to 

13 receive and store, firm, or shape variable 

14 renewable or off-peak energy and to deliver 

15 such energy primarily for onsite consump16 tion. 

17 Such term may include thermal energy storage 

18 systems and property used to charge plug-in 

19 and hybrid electric vehicles if such property or 

20 vehicles are equipped with smart grid equip21 ment or services which control time-of-day 

22 charging and discharging of such vehicles. Such 

23 term shall not include any property for which 

24 any other credit is allowed under this chapter. 


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1 ‘‘(B) MINIMUM CAPACITY.—The term 

2 ‘qualified onsite energy storage property’ shall 

3 not include any property unless such property 

4 in aggregate— 

5 ‘‘(i) has the ability to store the energy 

6 equivalent of at least 20 kilowatt hours of 

7 energy, and 

8 ‘‘(ii) has the ability to have an output 

9 of the energy equivalent of 4 kilowatts of 

10 electricity for a period of 5 hours. 

11 ‘‘(C) LIMITATION.—In the case of qualified 

12 onsite energy storage property placed in service 

13 during the taxable year, the credit otherwise de14 termined under subsection (a) for such year 

15 with respect to such property shall not exceed 

16 $1,000,000.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to periods after the date of the 

19 enactment of this Act, under rules similar to the rules of 

20 section 48(m) of the Internal Revenue Code of 1986 (as 

21 in effect on the day before the date of the enactment of 

22 the Revenue Reconciliation Act of 1990). 


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1 SEC. 5. CREDIT FOR RESIDENTIAL ENERGY STORAGE 

2 EQUIPMENT. 

3 (a) CREDIT ALLOWED.—Subsection (a) of section 

4 25D of the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘and’’ at the end of paragraph 

6 (4), 

7 (2) by striking the period at the end of para8 graph (5) and inserting ‘‘, and’’, and 

9 (3) by adding at the end the following new 

10 paragraph: 

11 ‘‘(6) 30 percent of the qualified residential en12 ergy storage equipment expenditures made by the 

13 taxpayer during such taxable year, and’’. 

14 (b) QUALIFIED RESIDENTIAL ENERGY STORAGE

15 EQUIPMENT EXPENDITURES.—Section 25D(d) of the In16 ternal Revenue Code of 1986 is amended by adding at the 

17 end the following new paragraph: 

18 ‘‘(6) QUALIFIED RESIDENTIAL ENERGY STOR19 AGE EQUIPMENT EXPENDITURES.—For purposes of 

20 this section, the term ‘qualified residential energy 

21 storage equipment expenditure’ means an expendi22 ture for property— 

23 ‘‘(A) which is installed in or on a dwelling 

24 unit located in the United States and owned 

25 and used by the taxpayer as the taxpayer’s 

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1 tion 121), or on property owned by the tax2 payer on which such a dwelling unit is located, 

3 ‘‘(B) which— 

4 ‘‘(i) provides supplemental energy to 

5 reduce peak energy requirements primarily 

6 on the same site where the property is lo7 cated, or 

8 ‘‘(ii) is designed and used primarily to 

9 receive and store, firm, or shape variable 

10 renewable or off-peak energy and to deliver 

11 such energy primarily for onsite consump12 tion, and 

13 ‘‘(C) which— 

14 ‘‘(i) has the ability to store the energy 

15 equivalent of at least 2 kilowatt hours of 

16 energy, and 

17 ‘‘(ii) has the ability to have an output 

18 of the energy equivalent of 500 watts of 

19 electricity for a period of 4 hours. 

20 Such term may include thermal energy storage sys21 tems and property used to charge plug-in and hybrid 

22 electric vehicles if such property or vehicles are 

23 equipped with smart grid equipment or services 

24 which control time-of-day charging and discharging 

25 of such vehicles. Such term shall not include any 


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1 property for which any other credit is allowed under 

2 this chapter.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to property placed in service after 

5 the date of the enactment of this Act. 

Æ 


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