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Positive Energy Policy Trends Boost Companies Like Joule Case
Enthusiasm for policy to support clean and advanced clean energy technologies has swelled in recent years, becoming a mainstay campaign promise regardless of region or political affiliation. Leaders at the national stage may still quarrel about the best way to support emerging energy technologies, but recognition that government action can and should speed up the types of technologies that will keep the grid reliable, prevent the worst threats of climate change, and maintain affordable power for customers is finally pervasive.
That reality has been abundantly clear in recent years of elections and notably in landmark government actions enacted in recent years, months, and weeks. Particularly, much of that focus on energy policy has thankfully widened to thoroughly include energy storage, battery technologies, and associated component manufacturing. In fact, government officials have implemented new measures at a rate and breadth previously unseen such that casual observers may struggle to keep track of it all.
As a leading provider of unique, portable battery solutions that benefit businesses, homes, and even the grid, Joule Case has been keeping a close watch on these developments. And we’re here to let you know that: Yes—recent energy policy achievements are going to enhance the already great outlook for Joule Case as an energy storage leader. But the reality of how and where that support is coming from goes deeper than the oversimplified sound bites you may be hearing in the news.
With that in mind, this article breaks down the recent jam-packed months (and longer) to highlight how recent policy developments have come to position a battery provider like Joule Case for a bright future.
Looking at just these three buckets of spending alone (recognizing other areas of funding exist in other parts of the government, as well) presents companies like Joule Case with up to $25 billion of opportunity from which to benefit.
Much of the funds above that are actively available for energy storage projects, whether via tax incentives, grants, publicly funded R&D, or otherwise, are grouped along with other eligible technologies. For example, a given grant program may allocate $100 million that can be allocated to a certain number of battery, solar energy, and wind energy projects, but the breakdown of how much of that goes to energy storage vs. the other categories depends entirely on what companies bid and win for those funds.
To bring some more clarity as to the type of opportunities available to battery projects and companies, the following sections break down some of the specific provisions and measures that are most likely to benefit the world of energy storage.
The headlining action from the U.S. government recently, no doubt, has tended to come from recent legislation passing through Congress. With the power of the purse, Congressional leaders have had the opportunity to demonstrate a commitment to energy storage by funding projects, creating incentives, and more.
Signed into Law by President Biden on August 16, 2022
White House ‘By the Numbers’ Summary
The main event of all recent federal energy action recently, of course, was the Inflation Reduction Act (IRA) of 2022, which passed in August after months of debate, previous iterations of the bill that never gained the necessary momentum, and a growing sense of uncertainty as to whether the Biden Administration would be able to push anything through the narrowest possible majority in Congress.
Ultimately, the largest energy and climate bill in U.S. history (which brought $369 billion in energy and climate funding) passed, with energy storage being one of the key beneficiaries, in the form of the following:
Standalone Investment Tax Credits (ITC): Such investment tax credits were previously responsible for much of the rapid growth of the wind and solar sectors over the past 15 years, but similar tax credits were previously unavailable to energy storage projects unless they were paired on-site with eligible renewable generation. The ITC for which standalone energy storage projects are now eligible amounts to 30% of the project’s total installed costs. Further, this tax credit is eligible to grow by an additional 10% if the manufacture of such equipment meets certain labor standards and exceeds a threshold of American-made materials being used. The IRA also spells out an additional 10% in clean energy tax credits for projects located in companies that see main economic drivers being pushed out by the energy transition (e.g., those who rely on coal plants, oil drilling, or other fossil fuel businesses being displaced).
These standalone tax credits have been years in the making, with the first federal proposal of such a credit coming from New Mexico Senator Martin Heinrich back in 2016, but the passage has been an uphill battle. The growth in the energy storage market despite those tax credits not previously materializing demonstrates the power of the technology, which will only be accelerated now that such incentives are on the books.
Joule Case in particular will benefit from these new opportunities for energy storage standalone projects, as the portable nature of its product offerings makes them inherently standalone. Further, the deployable and mobile ability of Joule Case installations makes them primed for the aforementioned communities being impacted by the energy transition. Finally, as Joule Case continues to source more of its more responsible, American-made components for our products, higher levels of tax credits will add even more benefits.
Lastly, another benefit of the IRA is that the energy storage tax credits are completely technology agnostic, rather than prescriptive of lithium-ion batteries or any other narrowed-down technology. This provision means the same tax credits can apply to new and emerging battery technologies as well, the type of flexibility that perfectly positions Joule Case’s unique model of interchangeable and rapidly advancing models.
Overall, the Inflation Reduction Act provides much-needed certainty for the energy storage market, as certainty is perhaps the most valued currency for investment and ramping up of any clean technology project
Signed into Law by President Biden on August 12, 2022
White House Fact Sheet on CHIPS and Science Act
With the IRA stealing the spotlight, it’s easy to overlook the impact that the major legislation from just a few weeks prior would have in the CHIPS and Science Act. Specifically, this legislation unlocked $50 million per year from 2023 through 2027 to support research in energy storage technologies, with the goal of making U.S. manufacturing capabilities more competitive with overseas manufacturers that dominate the space.
For a company like Joule Case that seeks to get as many components as possible from the more reliable domestic supply chain, this type of support from legislation means that the costs of doing so will go down. In doing so, that cost savings can then be passed to the customer who can get products to fit their needs without having to worry about potential supply chain interruptions or price spikes.
Certain powers of the Executive Branch don’t require Congressional approval, and as the largest supporter of the clean energy transition that’s ever sat in the Oval Office, the Biden Administration has shown a commitment to supporting the energy storage sector and prioritizing the role that storage must play rather than focus on just renewables.
Issued on December 8, 2021
White House Fact Sheet on Executive Order
The Executive Order on Catalyzing America’s Clean Energy Economy Through Federal Sustainability that President Biden issued in late 2021 included nods to the Administration’s goals of being 100% carbon-free energy for federal facilities by 2030, and as one of the provisions, it included an outline of how battery energy storage systems would be used on military bases. Opening up these types of federally run facilities to energy storage is a key way the government can and will build up an even greater marketplace for energy storage technologies like those from Joule Case.
Issued March 31, 2022
Text of the Memo
Earlier this year, President Biden Issued a memo invoking the Defense Production Act, specifically to boost critical mineral supplies needed to meet clean energy needs. This action included a push to unlock U.S. mining capacity for lithium and other battery-specific materials that will continue to make more secure, reliable, and ultimately affordable the types of supply chains needed for battery production by Joule Case and its peers.
The following projects being funded by federal action aren’t highlighted to suggest they are specific opportunities for Joule Case to receive direct funding, but instead, the variety and steady stream of such funding becoming available demonstrates the direction that federal action is going in propping up the energy storage market today, increasing the inevitable penetration onto the grid. Joule Case will continue to be a part of that story, and as these projects play out Joule Case will benefit from reduced component costs, increased incentives for buyers, and generally more opportunities for energy storage projects to be implemented across different industries and regions.
Issued on December 21, 2020
Department of Energy Homepage for the Roadmap
At the beginning of 2020, the U.S. Department of Energy (DOE) released the Energy Storage Grand Challenge (ESGC), with its official roadmap coming out in December of that year. This challenge represented the first-ever comprehensive energy storage strategy from DOE, and the ESGC comes with specific goals for energy storage performance and cost reductions by 2030, which ensuing energy storage funding is meant to support.
Announced on July 14, 2021
Secretary Jennifer Granholm’s Announcement
The Long Duration Energy Storage Shot was announced by DOE with a goal of bringing multi-hour storage costs to a nickel per kWh by 2030, a 90% cost drop. This aspiration is part of the Energy Earthshot Initiative more broadly and frames the overall outcomes expected in the coming decade for batteries in the United States.
Announced on April 21, 2022
DOE Announcement
DOE’s Office of Electricity partnered with the DOE's Pacific Northwest National Laboratory to build a $75 million facility known as the Grid Storage Launchpad. This facility will be designed to “accelerate the development and deployment of long-duration, low-cost grid energy storage.” Experts at the Grid Storage Launchpad will test new technologies, basic materials upgrades, and prototype new initiatives. Expect the Grid Storage Launchpad to start operations in 2025, at which point more advanced, efficient, and affordable battery technologies will readily become available.
Issued on May 2, 2022
DOE Announcement
DOE made available $3.1 billion in funding for battery and component manufacturing efforts, along with recycling and reuse, via the Battery Materials Processing and Battery Manufacturing initiative and the Electric Drive Vehicle Battery Recycling and Second Life initiative. By bolstering domestic production and recycling, DOE seeks to provide a boost to U.S. stakeholders all along the energy storage supply chain, while incorporating sustainability and domestic investment in these supplies.
Announced May 12, 2022
DOE Announcement
DOE has also put forth a $505 million initiative called Long Duration Energy Storage for Everyone, Everywhere to bring long-duration (10+ hours) energy storage projects to commercialization over the next four years. The target is to bring small-scale, behind-the-meter pilots to fruition, while overall reducing the barriers to entry.
Phase III winners were announced on June 21, 2022
DOE Announcement
DOE and the National Renewable Energy Laboratory (NREL) have moved to Phase III of its lithium-ion Battery Recycling Prize this year, originally launched in 2019 but now moving to the designing of real-world pilots for battery recycling technologies. The goal of this initiative is to enable the recapture of up to 90% of the lithium-ion from used batteries to be recycled and reintroduced to critical supply chains.
Announced July 6, 2022
DOE Announcement
As a part of the Bipartisan Infrastructure Law passed in late 2021, DOE kicked off the Preventing Outages and Enhancing the Resilience of the Grid program that was to grant $459 million to States and Tribal Nations to improve the resilience of the grid. One of the key components of this was integrating distributed energy resources like batteries as a critical tool for grid reliability.
Funding was announced on August 2, 2022
DOE Announcement
DOE’s Solar and Wind Grid Services and Reliability Demonstration funding will offer $26 million for up to nine different projects that demonstrate the success that solar, wind, and/or energy storage can have on running the grid. These funds will be available for grants of projects at least 10 MW in size, as well as transmission-based projects.
Existing regulatory bodies in the energy industry have likewise been observing the energy storage trends and the future needs of the grid to integrate energy storage solutions more rapidly, creating opportunities themselves as appropriate.
Comments made at CLEANPOWER 2022 Conference on May 17, 2022
Press Coverage
The Commissioner of the Federal Energy Regulatory Commission (FERC) expressed during the CLEANPOWER 2022 conference that FERC would be investigating challenges currently in the way of energy storage installations participating in wholesale markets when paired with wind and solar, in addition to current requirements that allow storage participation in such markets.
Issued on June 16, 2022
FERC Proposal
FERC then made some more waves in trying to reduce the red tape facing energy storage projects with its proposal in June to require transmission providers to adopt a protocol of ‘first-ready, first served’ to bring energy storage projects online more quickly.
Before the passage of the Inflation Reduction Act, advocates would be hard-pressed to find examples where the federal government was really the leader in clean energy action, as for many years state-level governments have taken the lead while Washington DC continued to get bogged down by gridlock. While energy storage and clean energy advocates no doubt celebrate the long-awaited leadership from the federal government, state actions continue to be a key driver all the same.
Announced on May 20, 2022
Press Coverage
California regulators have been continually approving new energy storage projects to come online and provide boosted reliability and quality of power, including five separate energy storage contracts from Southern California Edison for nearly 500 MW.
Coverage on May 26, 2022
Press Coverage
With Texas still analyzing the perfect storm of influences gone wrong during 2021’s Winter Storm Uri that caused massive blackouts, state officials have been looking at the possibility of using residential owners of energy storage installations to create virtual power plants that can boost the state’s grid reliability during times of strain and challenges.
Coverage on July 12, 2022
Press Coverage
Illinois implemented a state procurement strategy aimed at repurposing retired coal plants as readily convertible sites for solar+storage projects, with an initial rollout at six different sites for such projects to go along with five that were for standalone energy storage.
Lastly, the actions listed above and actively ongoing have provided the backing for enthusiasm, growth, and future benefits in the energy storage sector. While many of these policies and funding actions will take years to be fully implemented and realized, the results are already being recognized today.
Data Published on July 27, 2022
U.S. Energy Information Administration Coverage
DOE’s bean-counting wing, the Energy Information Administration (EIA) has been observing the rise in utility-scale energy storage in recent years, with installations on the U.S. grid rising from 1.4 GW in 2020 to 4.6 GW as of the beginning of this year, led by price arbitrage opportunities and storage paired with solar energy generation. This momentum was entrenched before the landmark IRA provisions were known or enacted.
Published June 15, 2022
Wood Mackenzie’s Solar Storage Report
As with many parts of the economy, supply chain challenges arose for energy storage that put a damper on some projects being ready for rollout and implementation. Despite those unavoidable economic, geopolitical, and pandemic-related shortfalls that undoubtedly impacted the energy storage sector, the U.S. Storage Monitor report highlighted that grid-scale storage projects quadrupled in the first quarter of 2022 compared with the year before, beating out the results from 2021 as a whole, with California, Texas, and Puerto Rico being among the leaders.
Coverage on August 10, 2022
Press Coverage
The Inflation Reduction Act is already providing the needed boost to the U.S. energy storage market, such as a Norwegian battery cell producer, citing the IRA as a reason, accelerating its plans to develop U.S. manufacturing capacity.
Coverage on August 12
Press Coverage
Wood Mackenzie forecasts the U.S. as a leader in energy storage and projects the nation to have 600 Gigawatthours (GWh) of capacity installed by 2031 (average addition of 54 GWh per year to reach a total peak power capacity from energy storage of 27 gigawatts [GW] added in the year 2031). Another view: Wood Mackenzie’s forecast projected only 100 GW of grid-scale storage installed from 2022-2031, but now that forecast has grown to 122-135 GW with the inclusion of recent policy wins.
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