Biden’s New Climate Framework Retains Microgrid Tax Credit

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A framework of the Build Back Better bill released by President Joe Biden this week retains a 30% tax credit for microgrid controllers.

microgrid tax credit

Photo of the White House by Vacclav/Shutterstock.com

The credit was initially proposed by California Congressman Jimmy Panetta, D-Carmel Valley, as part of the MICROGRID Act.

The microgrid provisions are included in a larger climate framework that makes a series of investments in clean energy.

If the framework wins Congressional support, it will offer the full credit to microgrid projects that begin construction by Jan. 1, 2027, and meet prevailing wage and apprenticeship standards. It applies to projects that are 4 kW to no more than 20 MW.

Biden released the framework, a scaled down version of his original climate proposal, Thursday after weeks of struggle to negotiate terms with conflicting factions in the Democratic party.

The new language continues to champion solar and energy storage, providing a tax credit that would cut the cost of installing rooftop solar for a home by around 30%, shortening the payback period by about five years, according to information released by the White House. 

The White House said the framework also would:

  • Lower the cost of American-made electric vehicles, via a tax credit, by $12,500 for a middle-class family.
  • Provide clean energy grants and loans to rural communities. 
  • Fund port electrification.
  • Facilitate the deployment of cleaner transit, buses and trucks.
  • Offer grants to environmental justice communities.

A clean energy standard for utilities was dropped from the bill, following opposition from Sen. Joe Manchin of West Virginia over the cost of the provision.

Despite the loss of the clean energy standard, the framework won widespread support from environmental and clean energy groups.

“The proposed Build Back Better framework would be a game changer in tackling the climate crisis,” said Lisa Frank, Washington legislative office executive director for Environment America. It clears the way for our country to more easily tap abundant clean energy from the sun and wind and will usher in a decade of clean energy growth by making renewables less expensive for consumers and businesses.

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About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.