The IRA expanded the investment tax credit by eliminating the requirement that a storage system be charged by solar and including stand-alone energy storage systems
There are significant tax opportunities related to the investment in battery energy storage technologies. Disclaimer: We would encourage you to seek your own tax advice. This article
The U.S. Department of the Treasury and IRS have issued Final Regulations regarding the investment tax credit (ITC) for Section 48 of the Internal Revenue Code. The regulations include the ITC for energy
To calculate the amount your § 48 or § 48E project is eligible for, multiply the applicable tax credit percentage by the "tax basis," or the amount spent on an eligible unit of energy property or
Homeowners can access major tax benefits for energy storage solutions available in 2025. Credits are nearly 30% on costs for those who qualify.
The Treasury Department and IRS have issued final regulations on clean electricity production and investment tax credits, providing guidance on Sections 45Y and 48E
In June of this year the Government of Canada approved and passed into law four new Clean Economy ITC''s. The Clean Technology, Clean Technology Manufacturing, Clean Hydrogen, and Carbon Capture,
The final regulations also clarified that hydrogen storage property includes above-ground storage, hydrogen liquefaction equipment and does not include equipment used
Treasury finalizes ITC rules, providing clarity to solar, storage, other clean energy sectors The final rules address comments on the draft guidance concerning offshore
Tax Credit Monetization Here''s how Inflation Reduction Act''s new direct pay and transfer options allow more organizations to utilize clean energy tax credits for equipment placed in service on or after
For the first time, standalone storage systems will be eligible for a 30 percent investment tax credit (ITC) — and up to 70 percent with additional incentives.
This is due to the act''s expansion of federal income tax credits for standalone energy storage facilities and for the manufacture of energy storage equipment, as well as its expansion of opportunities for
Provides a tax deduction for the cost of energy eficiency improvements to commercial buildings, installed as part of the building envelope; interior lighting systems; or the heating, cooling,
Co-located energy storage: The final rules clarify that a section 48 credit may be claimed for energy storage technology that is co-located with and shares power conditioning equipment with a qualified
Technology-neutral investment tax credits are now available for clean energy projects constructed or supplying energy in 2025. Since the OBBA was signed into law on July
On December 4, 2024, the US Treasury and IRS issued final regulations (TD 10015) clarifying the definition of energy property and rules for the energy credit under Section
This placed-in-service deadline would not apply to energy storage technology. Moreover, the OBB-A eliminates credit for leased residential solar water heating and wind
Riding the tailwinds of constituent demand for the rapid decarbonisation of the US power grid, Congress passed the Inflation Reduction Act (IRA) on 16 August 2022. The IRA expanded the US federal tax credits that are
Navigate the federal tax credit for battery storage systems. Understand the key financial considerations and procedural steps to successfully claim this incentive.
Revised February 13, 2023 Below are slides the authors prepared about tax credit opportunities and development challenges for battery storage. Tax benefits available after passage of the IRA: What is
These new tax credit opportunities under the Inflation Reduction Act substantially enhance the financial incentives for deploying energy storage systems, both at
Technology-neutral investment tax credits are now available for clean energy projects constructed or supplying energy in 2025. Since the OBBA was signed into law on July 4, 2025, there are new rules and
Senate Reconciliation Bill Draft Preserves Energy Storage ITC While Reducing Solar PV, Wind, and EV Incentives — In a recent development, US tax credits for energy
Co-located energy storage: The final rules clarify that a section 48 credit may be claimed for energy storage technology that is co-located with and shares power conditioning equipment with a qualified
How Tax Credits for Energy Storage Systems Work Tax credits for energy storage systems are designed to incentivize the adoption of clean energy technologies by
Co-located energy storage: The final rules clarify that a section 48 credit may be claimed for energy storage technology that is co-located with and shares power conditioning
The ITC was also expanded to explicitly include standalone energy storage, microgrid controllers, and other clean energy technologies. Created New Monetization
The tax rate for energy storage benefits can vary significantly depending on various factors, including the jurisdiction, type of energy storage system employed, and the
The IRS''s Notice 2024-41 simplifies the IRA domestic content requirements for solar, onshore wind and battery projects to qualify for a 2% or 10% bonus tax credit.
Tax credits have a significant positive impact on the deployment of standalone energy storage facilities by making such projects financially more viable and attractive to
Microinverter systems have been praised for their modularity and simplicity. But as solar systems grow in average capacity and integrate battery storage, that simplicity comes
Starting in 2025, the U.S. adopted a tech-neutral framework for clean energy tax credits, which includes §48E and §45Y credits. These credits allow newer clean energy
Tax-Exempt Entities and the Investment Tax Credit (§ 48 and § 48E) Tax-exempt and governmental entities, such as state and local governments, Tribes, religious organizations,
By reducing the upfront costs of energy storage systems, these tax credits make it more affordable to enhance energy security, improve grid stability, and reduce environmental
• For projects beginning construction on or after Jan. 29, 2023 or where the maximum net output is 1 MW or greater, the base tax credit is 6% of the taxpayer’s basis in the energy property or qualified facility (or energy storage technology).
Of particular importance to the energy storage industry, the government has released final regulatory guidance for the ITC (both Section 48 and 48E of the Code), prevailing wage and apprenticeship (PWA) requirements, and transferability and direct payment, as well as other guidance on the energy community and domestic content tax credit “adders.”
The credit ranges from 30 percent to as much as 70 percent for nonresidential installations if certain domestic content and community-related criteria can be met. This credit is expected to increase investments in energy storage and capacity additions to 27 gigawatts a year by 2031. 1
While the vitality of the IRA tax benefits in their current form is currently subject to uncertainty given the results of the 2024 federal general election, the existing market practice for financing energy storage facilities since the IRA’s passage continues to evolve in reaction to the act’s new requirements and opportunities.
The energy storage industry has continued to progress over the course of 2024 and into 2025, buoyed in significant part by the federal income tax benefits in the form of tax credits enacted under the Inflation Reduction Act of 2022 (IRA).
Given the current state of battery cell production in the United States, battery energy storage has largely been locked out of a financeable position on qualifying for the domestic content adder given the stated materiality of battery cells to a domestic content analysis.
