The 30% federal tax credit for battery storage can generally be combined with other eligible tax credits, but there are specific considerations:
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Stacking with other energy credits:
The battery storage credit (under Section 25D) can be claimed alongside other residential clean energy credits (e.g., solar panels, geothermal heat pumps) if the projects meet separate eligibility criteria. For example, a $50,000 solar + battery system could yield a $15,000 combined credit (30% of total costs). -
Non-refundable nature limits total benefit:
The credit is non-refundable, meaning it only offsets taxes owed. If other credits reduce your tax liability to $0, any remaining credit balance from the battery storage (or other credits) cannot be refunded. For instance, $3,000 in credits against $1,000 owed would only provide a $1,000 benefit. -
Cost basis adjustments:
Rebates or subsidies (e.g., utility incentives) must be subtracted from the total project cost before calculating the 30% credit. This prevents “double-dipping” where multiple incentives cover the same expense.
Key eligibility criteria for combining credits:
- No income limits, but you must owe federal taxes to claim any non-refundable credits.
- 3 kWh minimum capacity for standalone batteries (post-2022 installations).
- No maximum system size or cost.
Check the IRS Section 25D guidelines and consult a tax professional for multi-credit optimization.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/are-there-any-restrictions-on-combining-the-battery-storage-tax-credit-with-other-tax-credits/
