Yes, there are specific tax credits available for commercial energy storage systems in the United States. Here are the details:
Investment Tax Credit (ITC) for Commercial Energy Storage Systems
- Eligibility: As of recent changes, energy storage projects can qualify for tax credits on a standalone basis. This means they do not necessarily need to be co-located with renewable energy generators like solar to receive the ITC.
- Credit Rates: The base value of the tax credit is 6% of the project’s qualifying energy costs. However, projects meeting prevailing wage and apprenticeship requirements can qualify for up to a 30% credit. Additional bonus adders can increase this to up to 50% of the project’s cost.
- Applicability: These credits are available under Section 48 of the Internal Revenue Code for qualifying energy storage technologies such as batteries, pumped hydro, compressed air, etc.
Tax Credit Transferability
- Energy storage project developers can monetize tax credits by selling them in transfer agreements, which can be simpler than traditional tax equity investments.
Recent Developments and Legislation
- There have been legislative efforts to support standalone energy storage tax credits, including bills like the Energy Storage Tax Incentive and Deployment Act and the Clean Energy for America Act.
- These efforts aim to simplify access to these credits for a broader range of stakeholders by allowing direct payments instead of just credits.
In summary, commercial energy storage systems can benefit from significant tax incentives, especially those that meet specific labor and apprenticeship requirements. These credits support the growing demand for energy storage as part of a more reliable and renewable energy grid.
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