Nevada legislature passes tax credits for utility-scale storage projects
In a move that could significantly drive battery storage origination opportunities in Nevada, the state officially passed legislation that would expand its Renewable Energy Tax Abatement program to utility-scale storage projects.
The legislation was first introduced as SB 448 by Nevada Senator Chris Brooks in mid-May. The tax abatement program that it expands grants sales and use tax and property tax abatements to qualifying renewable projects located in the state. To date, the program has awarded such abatements to 57 projects, though none have been awarded so far this year. These include solar, biomass, geothermal and wind projects.
To qualify, projects must meet a rather stringent list of requirements. Most notably, all projects must be over 10 MW and cannot be funded by any governmental entity in Nevada except for private activity bonds. The program does have investment thresholds that must be met, however; projects must carry a capital investment minimum of USD 3m for eligibility in counties with a population of less than USD 100,000. For more populated counties, that investment minimum balloons to USD 10m. Eligibility is determined through a process that includes public hearings and can take several months to complete. Selected projects are subject to annual compliance audits.
Additionally, the program includes several labor requirements. Each project must employ 75 or more full-time employees during construction and at least half must be Nevada residents for projects being constructed in counties of over 100,000 residents (that requirement slips to 50 full-time employees for counties of less than 100,000). Furthermore, hourly wages for facility employees must be at least 110 percent of the average statewide hourly wage and 175 percent for construction employees, plus health insurance benefits.
Critically, the new law will also require Nevada to join an RTO by 2030 and creates a Regional Transmission Coordination Task Force that will help the state get there. There are additional transmission measures, as well, including language that will essentially require the state's PUC to reconsider a previous decision regarding state utility NV Energy's USD 2.5bn Greenlink Nevada transmission line project. The current decision only grants permitting approval, not construction approval, for anything beyond Phase I of the project. Although he did not name Greenlink Nevada outright, Brooks says that transmission projects like it are essential to opening the state for the "billions of dollars of private clean energy investment" that is possible in areas that are currently without transmission lines.
"It's not the PUC's job to encourage economic development in Nevada," Brooks said. "It's their job to keep the lights on. But we need to become a regional hub for transmission in the West so that we can attract economic activity for this state. If we do not start immediately, then we will lose the opportunity to attract that investment."
Other provisions in the legislation include one allowing multi-family and commercial buildings to be included in the state's net metering program and another that gives large new businesses in the state a discount on energy prices. It also includes a USD 100m EV spending plan with an additional requirement for NV Energy to file its own USD 100m plan by September. All of this is to help Nevada reach its current goal of reaching net zero carbon emissions by 2050. The state also has an intermediate goal of boosting the state's RPS to 50 percent by 2030.