I 

117TH CONGRESS 

1ST SESSION H. R. 2482 

To amend the Internal Revenue Code of 1986 to provide tax credits for 

microgrid property. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 13, 2021 

Mr. PANETTA 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 

tax credits for microgrid property. 

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 ‘‘Making Imperiled 

5 Communities Resistant to Outages with Generation that 

6 is Resilient, Islandable, and Distributed Act’’ or as the 

7 ‘‘MICROGRID Act’’. 

8 SEC. 2. TAX CREDITS FOR MICROGRID PROPERTY. 

9 (a) IN GENERAL.—Subpart E of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 48C the fol2 lowing new section: 

3 ‘‘SEC. 48D. MICROGRID PROPERTY. 

4 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

5 microgrid property credit for any taxable year is an 

6 amount equal to the applicable percentage of the basis of 

7 the qualified microgrid property placed in service by the 

8 taxpayer during such taxable year. 

9 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

10 this section— 

11 ‘‘(1) IN GENERAL.—The term ‘applicable per12 centage’ means, with respect to qualified microgrid 

13 property which is part of any qualified microgrid, 

14 the percentage determined in accordance with the 

15 following table determined with respect to the cal16 endar year in which construction of such qualified 

17 microgrid begins: 

‘‘In the case of calendar year: The applicable 

percentage is: 

2025 or any prior calendar year ............................ 30 percent 

2026 ....................................................................... 26 percent 

2027 ....................................................................... 22 percent 

2028 ....................................................................... 10 percent. 

18 ‘‘(2) TREATMENT OF CONVERSIONS.—In the 

19 case of any system which is converted into a quali20 fied microgrid, the construction of such microgrid 

21 shall be treated for purposes of this subsection as 


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1 beginning on the date on which such conversion be2 gins. 

3 ‘‘(c) QUALIFIED MICROGRID PROPERTY.—For pur4 poses of this section— 

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

6 microgrid property’ means any qualified property— 

7 ‘‘(A) which is part of a qualified microgrid, 

8 ‘‘(B) either— 

9 ‘‘(i) the construction, reconstruction, 

10 or erection of which is completed by the 

11 taxpayer, or 

12 ‘‘(ii) which is acquired by the taxpayer 

13 if the original use of such property com14 mences with the taxpayer, 

15 ‘‘(C) which is not part of a bulk-power sys16 tem (as defined in section 215 of the Federal 

17 Power Act (16 U.S.C. 824o)), and 

18 ‘‘(D) with respect to which depreciation (or 

19 amortization in lieu of depreciation) is allow20 able. 

21 ‘‘(2) QUALIFIED MICROGRID.—The term ‘quali22 fied microgrid’ means an electrical system which— 

23 ‘‘(A) incorporates a microgrid controller, 


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1 ‘‘(B) includes equipment which is capable 

2 of generating not less than 4 kilowatts and not 

3 greater than 50 megawatts of electricity, 

4 ‘‘(C) is capable of operating in connection 

5 with the electrical grid and as a single control6 lable entity with respect to such grid, and 

7 ‘‘(D) is capable of operating independently 

8 (and disconnected) from such grid. 

9 ‘‘(3) QUALIFIED PROPERTY.— 

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

11 property’ means— 

12 ‘‘(i) microgrid controllers, and 

13 ‘‘(ii) electric distribution and 

14 switchgear property. 

15 ‘‘(B) ADDITIONAL CONSIDERATIONS.— 

16 Upon consultation with the Secretary of En17 ergy, the Secretary may determine that a quali18 fied property under this section includes prop19 erty connected to the bulk power system (as de20 fined in section 215 of the Federal Power Act 

21 (16 U.S.C. 824o)). 

22 ‘‘(4) MICROGRID CONTROLLER.—The term 

23 ‘microgrid controller’ means, with respect to oper24 ation and islanding of a qualified microgrid, the 

25 equipment which is necessary to monitor and control 


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1 the energy resources and loads on such microgrid to 

2 maintain acceptable frequency, voltage, or economic 

3 dispatch. Such term includes any software and net4 working hardware necessary to the operation of such 

5 equipment. 

6 ‘‘(5) ELECTRIC DISTRIBUTION AND

7 SWITCHGEAR PROPERTY.—The term ‘electric dis8 tribution and switchgear property’ means, with re9 spect to operation and islanding of a qualified 

10 microgrid, the equipment which is necessary to de11 liver electric power from energy resources on such 

12 microgrid to loads on the same such microgrid. Such 

13 term includes breakers, fuses, wires, switchgear cabi14 nets and bussing, paralleling switchgear, trans15 formers, power quality correction equipment, trans16 fer switches, disconnects, protective relays, metering 

17 equipment, and wired and wireless communications 

18 equipment necessary to the operation of such 

19 microgrid. 

20 ‘‘(6) TREATMENT OF SPARE PARTS.—Any 

21 qualified property which is held by the taxpayer as 

22 a spare part for possible replacement of qualified 

23 property which is part of a qualified microgrid shall 

24 not fail to be treated as part of such microgrid for 

25 purposes of this section. 


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1 ‘‘(d) SPECIAL RULES.— 

2 ‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES

3 MADE APPLICABLE.—Rules similar to the rules of 

4 subsections (c)(4) and (d) of section 46 (as in effect 

5 on the day before the date of the enactment of the 

6 Revenue Reconciliation Act of 1990) shall apply for 

7 purposes of this section. 

8 ‘‘(2) DENIAL OF DOUBLE BENEFIT.—No credit 

9 shall be determined under this section with respect 

10 to the basis of any property if a credit is determined 

11 under any other section of this title with respect to 

12 such basis. 

13 ‘‘(e) ALLOWANCE OF PERSONAL CREDIT FOR RESI14 DENTIAL MICROGRIDS.—In the case of a qualified 

15 microgrid placed in service by any individual in the resi16 dence of such individual— 

17 ‘‘(1) this section shall be applied without regard 

18 to subparagraph (C) of subsection (c)(1), and 

19 ‘‘(2) the microgrid property credit determined 

20 under this section for any taxable year with respect 

21 to qualified microgrid property (determined after ap22 plication of paragraph (1)) which is part of such 

23 qualified microgrid shall be taken into account as an 

24 increase in the amount of the credit otherwise allowVerDate Sep 11 2014 03:05 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2482.IH H2482

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1 able to the taxpayer under section 25D for such tax2 able year. 

3 ‘‘(f) TERMINATION.—No credit shall be determined 

4 under this section with respect to any property placed in 

5 service after December 31, 2028.’’. 

6 (b) ELECTIVE PAYMENT OF CREDIT.—Subchapter B 

7 of chapter 65 of such Code is amended by adding at the 

8 end the following new section: 

9 ‘‘SEC. 6431. ELECTIVE PAYMENT OF MICROGRID PROPERTY 

10 CREDIT. 

11 ‘‘(a) ENERGY PROPERTY.—In the case of an eligible 

12 person making an election (at such time and in such man13 ner as the Secretary may provide) under this section with 

14 respect to any portion of the credit determined under sec15 tion 48D (determined without regard to subsection (d) of 

16 this section) or any portion of the credit allowed under 

17 section 25D by reason of section 48D(e) (as so deter18 mined), such eligible person shall be treated as making 

19 a payment against the tax imposed by subtitle A for the 

20 taxable year equal to the portion to which such election 

21 applies. 

22 ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur23 poses of this section— 

24 ‘‘(1) ELIGIBLE PERSON.—The term ‘eligible 

25 person’ means— 


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1 ‘‘(A) any organization exempt from tax 

2 under section 501(a), 

3 ‘‘(B) any State or local government, or a 

4 political subdivision thereof, or any agency, au5 thority, or instrumentality of any one or more 

6 of the foregoing, or any corporation which is 

7 wholly owned, directly or indirectly, by any one 

8 or more of the foregoing, 

9 ‘‘(C) any Indian tribal government, 

10 ‘‘(D) any organization described in section 

11 1381(a)(2), and 

12 ‘‘(E) any not-for-profit electric utility 

13 which had or has received a loan or loan guar14 antee under the Rural Electrification Act of 

15 1936. 

16 ‘‘(2) INDIAN TRIBAL GOVERNMENT.—The term 

17 ‘Indian tribal government’ shall have the meaning 

18 given such term by section 139E. 

19 ‘‘(3) DETERMINATION OF CREDITS.—The 

20 amount of any credit described in subsection (a) 

21 which is treated as allowed to any eligible person 

22 shall be determined for purposes of such subsection 

23 in the same manner as though such eligible person 

24 were subject to the tax imposed under chapter 1. 


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1 ‘‘(4) TIMING.—The payment described in sub2 section (a) shall be treated as made on— 

3 ‘‘(A) in the case of any government, or po4 litical subdivision, to which paragraph (1) ap5 plies and for which no return is required under 

6 section 6011 or 6033(a), the later of the date 

7 that a return would be due under section 

8 6033(a) if such government or subdivision were 

9 described in that section or the date on which 

10 such government or subdivision submits a claim 

11 for credit or refund (at such time and in such 

12 manner as the Secretary shall provide), and 

13 ‘‘(B) in any other case, the later of the due 

14 date of the return of tax for the taxable year 

15 or the date on which such return is filed. 

16 ‘‘(5) WAIVER OF SPECIAL RULES.—In the case 

17 of an election under this section, the determination 

18 of any applicable credit shall be without regard to 

19 paragraphs (3) and (4)(A)(i) of section 50(b). 

20 ‘‘(6) GOVERNMENTAL ENTITIES TREATED AS

21 TAXPAYERS.—In the case of an election under this 

22 section— 

23 ‘‘(A) any State or local government, or a 

24 political subdivision thereof, or 

25 ‘‘(B) any Indian tribal government, 


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1 shall, to the extent not a taxpayer as defined under 

2 section 7701(a)(14), be treated as a taxpayer for 

3 purposes of this section and determining any appli4 cable credit. 

5 ‘‘(c) EXCLUSION FROM GROSS INCOME.—Gross in6 come of the taxpayer shall be determined without regard 

7 to this section. 

8 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—The credit oth9 erwise determined under section 45D (and the credit oth10 erwise allowed under section 25D by reason of section 

11 48D(e)), determined without regard to this subsection, 

12 shall be reduced by the amount of the portion of such 

13 credits with respect to which the taxpayer makes the elec14 tion under subsection (a).’’. 

15 (c) CONFORMING AMENDMENTS.— 

16 (1) Section 46 of such Code is amended by 

17 striking ‘‘and’’ at the end of paragraph (5), by strik18 ing the period at the end of paragraph (6) and in19 serting ‘‘, and’’, and by adding at the end the fol20 lowing new paragraph: 

21 ‘‘(7) the microgrid property credit.’’. 

22 (2) Section 49(a)(1)(C) of such Code is amend23 ed by striking ‘‘and’’ at the end of clause (iv), by 

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1 serting a comma, and by adding at the end the fol2 lowing new clause: 

3 ‘‘(vi) the basis of any qualified 

4 microgrid property under section 48D.’’. 

5 (3) Section 50(a)(2)(E) of such Code is amend6 ed by striking ‘‘or 48C(b)(2)’’ and inserting 

7 ‘‘48C(b)(2), or 48D(d)(1)’’. 

8 (4) The table of sections for subpart E of part 

9 IV of subchapter A of chapter 1 of such Code is 

10 amended by inserting after the item relating to sec11 tion 48C the following new item: 

‘‘Sec. 48D. Microgrid property.’’. 

12 (5) The table of sections for subchapter B of 

13 chapter 65 of such Code is amended by adding at 

14 the end the following new item: 

‘‘Sec. 6431. Elective payment of microgrid property credit.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to periods after December 31, 

17 2020, under rules similar to the rules of section 48(m) 

18 (as in effect on the day before the date of the enactment 

19 of the Revenue Reconciliation Act of 1990). 

Æ 


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