Yes, you can combine federal incentives with state rebates for battery storage. Here’s how these incentives work together:
Federal Incentives
- Residential Clean Energy Credit: Offers a 30% tax credit for eligible battery storage systems (with a capacity of at least 3 kWh) installed from 2022 to 2032. This credit phases down to 26% in 2033 and 22% in 2034.
- Investment Tax Credit (ITC): Although primarily aimed at solar systems, standalone energy storage can also qualify under certain conditions. The Inflation Reduction Act allows for a 30% ITC for standalone energy storage projects, but this is generally more applicable to commercial projects.
State Rebates and Incentives
- Many states offer additional rebates and incentives to encourage the adoption of battery storage. For example:
- California offers the Self-Generation Incentive Program (SGIP), providing rebates based on battery capacity and prioritizing high fire threat districts.
- Connecticut has the Energy Storage Solutions program, offering up to $16,000 for residential installations.
- Massachusetts includes incentives through programs like Mass Save Connected Solutions.
Combining Incentives
- General Guidance: Federal tax credits and state rebates can generally be combined to further reduce the cost of installing a battery storage system. However, it’s crucial to review the terms of each incentive to ensure they can be stacked together.
- Considerations: When calculating federal tax credits, you typically need to subtract subsidies or rebates from the qualified property expenses. However, state incentives might not be considered a direct purchase-price adjustment if they are not labeled as rebates by the IRS, potentially allowing them to be added without reducing federal credits.
Always consult with a tax professional to ensure compliance and maximize your savings, as tax laws and regulations can be complex.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-i-combine-federal-incentives-with-state-rebates-for-battery-storage/
