Congressman Panetta Introduces Legislation to Incentivize Independent Energy Microgrids

Carmel Valley, CA…Congressman Jimmy Panetta (D-Carmel Valley) introduced the Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable, and Distributed (MICROGRID) Act. The legislation incentivizes the expansion and deployment of microgrids, which provide backup power, independent from the larger energy grid, during emergencies. As extreme weather events, such as wildfires, become increasingly common, microgrids can mitigate the impacts of grid outages and public safety power shutoffs on communities using cleaner energy sources.

The bill creates a 30% tax credit for a qualifying microgrid property through 2025, phasing down to 10 percent by 2028 and sunsetting in 2029 to incentivize the expansion and deployment of microgrids at the local level. The credit can be taken by governments and nonprofits as a direct payment, helping our communities take advantage of the credit.

“Many California communities, including those on the Central Coast, are frequently experiencing power failures and shutoffs due to wildfires, public safety power shutdowns, and other emergencies driven by extreme weather events,” said Congressman Panetta. “My MICROGRID Act would provide accessible tax credits for local governments to build and deploy microgrids, offering a cleaner energy alternative to fossil fuel generators that are independent from our energy grid. Expanding and deploying microgrids can harness clean energy sources, keep our homes and critical infrastructure connected when the larger grid fails, and lead to reliable and consistent electricity for our homes and safety for our communities.”

“As the Santa Cruz City Council looks to update our Climate Action Plan for 2030, energy resiliency for the Santa Cruz region is certain to be one of the goals of our vision. We applaud Congressman Panetta for his efforts to aggressively address climate change and support the goals of incentivizing microgrid investment as an important piece of the area’s overall resilience strategy. As the home to microgrid pioneers such as Sandbar Solar, our City strongly supports this proposed change to the federal tax code to provide critical assistance to local governments in protecting our most vulnerable communities,” said Santa Cruz Mayor Donna Meyers.

“Gonzales, a small City of approximately 9,000 residents who are dependent on agriculture, has a history of being innovative to ensure City services and employment opportunities for our citizens. Now to ensure and expand our economy and employment opportunities further, and to provide a steady power source for our industrial community, we are investing in our own energy future by developing a multi-customer microgrid. Our goal is to be able to supply reliable, nonstop, high-quality electricity to our highly valued ag processors who are the base of our employment, and therefore the livelihood for families who live and work in our small town. We believe our project could serve as a role model for other small cities in California. There is no doubt that California’s infrastructure needs significant investment, and on a small scale supporting the MICROGRID Act to incentivize the buildout, and deployment of microgrids is absolutely necessary as a base element of infrastructure and improvement in California,” said Gonzalez Mayor Jose L. Rios.

“Microgrids can be an important piece of any community’s energy resiliency plans, particularly for those in the most vulnerable and underserved areas, as we continue to look for ways to battle the effects of climate change on the Monterey Bay region. Across the country we’ve seen the impacts of grid failures and the need for immediate, safe and cost-effective solutions for resiliency. Congressman Panetta’s proposal provides incentives to expand and kick-start microgrid projects nationwide and as a result ensure that all communities have another tool for reliable power generation,” said Santa Cruz County Supervisor Zach Friend.

“As a County Supervisor, supporting sustainability and moving towards a more resilient future is essential for our community and generations to come. Microgrids allow end-users to disconnect from the traditional grid to operate independently to operate while the primary grid is down for faster system response and recovery. The Microgrid Act would provide incentives to businesses with credit for commercial and residential projects to help build a more resilient future. Protecting our County’s electrical grid from power outages is vital as we face increased frequency and intensity of events caused by severe weather,” said Mark Medina, District 1 Supervisor, Board Chairman.

“The County is supportive of distributed energy resources, including microgrid controls, that would enable local sources of renewable energy to provide clean backup power in the event of an outage as well as create a more modern and flexible power system. Congressman Panetta’s MICROGRID Act will provide an effective tool to facilitate the development of distributed energy for the benefit of our residents as they confront the increasing challenges of extreme weather and climate change,” said Wendy Root Askew, Chair, Monterey County Board of Supervisors.

“The Monterey Bay Economic Partnership (MBEP), a regional member-supported nonprofit consisting of over 80 public, private and civic entities located throughout Monterey, San Benito and Santa Cruz counties, supports Congressman Panetta’s Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable, and Distributed (MICROGRID) Act, which would provide a 30 percent tax credit for qualified microgrid property. Congress should incentivize the buildout and deployment of microgrids which can provide backup power, islanded from the grid, during emergencies; thus, increasing community resilience. Microgrids would allow utilities to target blackouts much more precisely and would reduce the economic impact of blackouts and help the grid function more smoothly even when there are no emergencies,” said Kate Roberts, President & CEO of MBEP.

“The MICROGRID Act is a solution to facilitate local governments’ ability to develop much-needed resources and continue providing reliable, critical services in times of Public Safety Power Shutoff events and grid unreliability,” said Neil McCormick, Chief Executive Officer of the California Special Districts Association. “California’s special districts applaud Congressman Panetta for leading on this legislation, and for ensuring special districts are included in direct credits for developing qualified microgrids.”

“Central Coast Community Energy (3CE) appreciates Representative Panetta’s leadership in to ensure strong and resilient electricity grids in support of our State and federal climate goals for a carbon-free future. Eliminating fossil fuels requires greater commitments to electrification and infrastructure investment,” shares CEO of 3CE, Tom Habashi. “Innovative policies that incentivize the construction of island-able microgrids will improve grid stability and resiliency to the benefit of all Californians, especially underserved communities and those with a need for emergency backup power during prolonged power outages.”

“High profile grid outages and power shutoffs from extreme weather events have a real economic impact on America’s communities and they highlight the fragile state of today’s electrical grid. As we have seen across the country, maintaining reliable electric supply is critical for other important services, including water treatment and delivery. There is a clear need to improve and modernize the electrical grid, and the buildout and deployment of microgrids can ensure communities have reliable power to maintain critical infrastructure and essential services when confronted by grid outages. NLC applauds Congressman Panetta for championing this legislation to improve energy reliability and community resilience,” said National League of Cities CEO and Executive Director Clarence E. Anthony.

“Congressman Panetta understands that we have to deal with both the causes and consequences of climate change. Communities and businesses must be prepared. Bloom Energy has deployed more than 100 microgrids that have powered essential services, like hospitals, data centers, and grocery stores, through over 1,800 outages including everything from wildfires in California to heat-induced blackouts in New York City. Congressman Panetta’s bill, which encourages investment and deployment of clean energy and microgrid technologies, will give communities and businesses a powerful new tool to help them secure their energy future,” said Paul Wilkins, Vice President for Federal Policy, Bloom Energy.

“We are grateful to Congressman Panetta and the co-sponsors of this bill for their leadership and look forward to continuing to work together to ensure that we can achieve the post-pandemic clean energy future we need,” said Annette Clayton, CEO and President, Schneider Electric North America. “This MICROGRID Act is exactly the kind of legislation that Congress should be passing now to create energy jobs and protect critical infrastructure. Increasing resilience across the nation is a vital step towards reducing the impact of climate-damaging disasters such as wildfires, flooding, polar vortexes, and protecting the safety of our communities. Renewable energies connected by microgrids can transform legacy infrastructure into a resilient power grid that offers reliable access and back-up power for our most vulnerable, frontline communities. We encourage Congress to pass this legislation.”

“The tax credits at the center of Congressman Panetta’s legislative proposal, the MICROGRID Act, will definitely help tribal governments directly offset the significant costs of setting up microgrids in their respective communities. Microgrids are important for tribes since they help build self-sufficiency and sustainability of tribal governments and their economies,” said Dante Desiderio, Executive Director, NAFOA.

“The MICROGRID Act provides some necessary federal resources directly to the citizens and civic groups in our communities that want to accelerate the clean energy transition. The tax credits will provide communities the opportunity to be part of the grid but also greatly improve the resiliency of local energy delivery,” said Tom Cochran, CEO and Executive Director of The United States Conference of Mayors.

“This innovative legislation will enable electric cooperatives to have needed financial flexibility as they leverage new technologies to keep the lights on,” said NRECA CEO Jim Matheson. “Electric cooperatives are already pioneering microgrids as a cornerstone of their reliability and resilience efforts in the most unique environments in the nation. As interest in microgrids grows, this legislation is an important part of the effort to make our electric grid more robust and reliable. I thank Representative Jimmy Panetta for his leadership of this important provision.”

“The MICROGRID Act aims to ensure that all water utilities have affordable access to back-up sources of power – a key factor in their ability to maintain operations during and after major storms. RCAP works with small water systems across the country, supporting their efforts to continue operations and make much needed repairs after hurricanes, flooding and weather emergencies like the recent ice storm that ravaged much of the South. We thank Congressman Panetta for his leadership and support policy efforts like the MICROGRID Act that provide direct assistance to help water utilities not only respond to the increasing number of severe weather events, but help build resilience and sustainability in accessing our country’s most important resource – safe drinking water,” said Nathan Ohle, Chief Executive Officer, RCAP.

“The American Public Power Association appreciates that the MICROGRID Act ensures that all utilities can benefit from this incentive intended to encourage investments in the creation of microgrids. The legislation would allow all utilities – not just some – to directly benefit from this incentive, making it fairer and more effective,” said Desmarie Waterhouse Vice President of Government Relations & Counsel.

“Sandbar was eager to support Congressman Panetta’s office in their development of much needed and productive legislation. The MICROGRID Act is a positive statement about our commitment to renewable, local, and resilient distributed energy. This ACT will broaden the reach and deployment of distributed reliable microgrids, while strengthening local economies, and providing access to communities that might otherwise be left behind. Now more than ever, we need leadership that makes clear statements toward that end, and we are grateful that Congressman Panetta is stepping forward to make progress,” said Scott Laskey, CEO, Sandbar.

“Reliable, clean power infrastructure is needed to improve economic development and local industry in communities across the country,” said Brian Curtis, CEO of Concentric Power Inc., an intelligent microgrid company based in California’s Salinas Valley. “Microgrids improve energy resilience and independence, and we wholeheartedly support Congressman Panetta’s bill to encourage their development.”

“Microgrids are a critical component of building sustainable, affordable, and reliable energy infrastructure in the 21st century. This bill will accelerate the deployment of microgrid technology, ensure that our nation is better prepared to mitigate threats to our energy security, and create thousands of high paying jobs for US workers. We urge Congress to pass this bill so that communities across the country can benefit from cutting-edge microgrid technologies,” said Tim Hade, Chief Operating Officer, Scale Microgrid Solutions