Energy Storage Maintains Key Tax Credits as Other Renewable Incentives Decline

While some renewable energy sectors face increasing headwinds, energy storage continues to enjoy broad political support and regulatory stability, according to a senior executive at one of New York City’s leading storage developers.

Sam McGarvey, who leads origination at NineDot Energy, points to recent federal policy changes as evidence of energy storage’s unique position. “Some of our other renewable technologies, like solar and wind had their incentive tax credits shortened, but certain key parts of more nascent energy technology, such as energy storage, geothermal and nuclear retained its tax credits over the same horizon under the initial Inflation Reduction Act,” McGarvey explains.

Multi-Level Support Structure

This federal backing is matched by strong local and state support, McGarvey notes. “Our projects are both supported by the city and the state and the utility, which is really important. I think that stakeholder support is really key,” he says.

McGarvey points to specific initiatives demonstrating this support: “The current mayor’s administration created this Mayor’s Office of Climate and Environmental Justice three and a half years ago, when Adams was put into office, which has been really supportive of rooftop solar and energy storage and EV charging.”

Market Growth Signals

This supportive environment is enabling significant market expansion, according to McGarvey. “We have currently seven operating projects across four different locations in New York City, we have an additional 50 projects that are in some phase of development,” he reveals, adding that the company aims to have 400 megawatts of projects operational in New York City in the next few years.

To support this growth, McGarvey says NineDot has expanded its team to 80 employees, bringing in expertise from utilities and various industries. “We have a really well-rounded team that’s well positioned to build these projects, engage locally, ensure that local elected officials are kept in the know, and neighbors are aware of what we’re building,” he explains.

Critical Infrastructure Recognition

McGarvey argues that energy storage’s strong policy position reflects its essential role in future energy systems. “Energy storage, I would say is, in layman’s terms, somewhat of the glue for a net zero future,” he says, explaining how storage helps manage intermittent renewable resources and even traditional power sources like nuclear plants that don’t always operate at full capacity.

This recognition extends to federal policymakers, McGarvey notes. “A lot of senators, congressmen and women presently recognize that energy storage is really key to a net zero future,” he says, suggesting this understanding has helped shield the sector from policy uncertainty affecting other renewable technologies.