Industry group urges smart grid tax credits

A coalition of companies that provide products and services for the smart grid released a raft of policy recommendations in November for the incoming Obama Administration and Congress.

Washington, D.C.-based Demand Response and Smart Grid Coalition (DRSG) says the recommendations are intended to show lawmakers ways that demand response and smart grid technologies can help meet economic and environmental goals.

To boost smart grid development, DRSG is pushing for the establishment of an Investment Tax Credit (ITC) for demand response and smart grid technologies, including smart metering systems, smart thermostats, meter data management systems and communications and control technologies. An ITC would accelerate investments while getting technologies to market faster, the group says.

In the vein of Production Tax Credits for wind and other renewable energy sources, DRSG recommends that lawmakers create a Reduction Tax Credit. Instead of awarding credits for energy produced, a reduction credit would be granted for kilowatt hours of electricity saved during peak periods.

The group also suggests increasing federal funding to states for smart grid development, creating a smart grid infrastructure fund, allowing a federal renewable portfolio standard—if one is enacted—to be met partially through energy efficiency and demand response and including smart grid technologies in building codes and appliance standards. If federal carbon emission caps are put in place, smart grid technologies could also be used to verify emission reductions, the group says.

Formerly known as the Demand Response and Advanced Metering Coalition, DRSG lists about 25 member companies among its ranks. These include San Mateo, Calif.-based eMeter, Liberty Lake, Wash.-based metering company Itron (Nasdaq: ITRI), Redwood City, Calif.-based Trilliant Networks, and Google (Nasdaq: GOOG), which joined the coalition in October 2008.