New California Legislation Would Create 30% Tax Credit With Direct Pay Option for Qualifying Microgrids

On April 14, California State 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 to provide backup power during emergencies.

The bill would create a 30% tax credit for a qualifying microgrid property through 2025, phasing down to 10% 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 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.”


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