The Inflation Reduction Act (IRA) significantly expands support for energy storage compared to previous U.S. policies through three key advancements:
Eligibility for standalone storage
Prior policies (e.g., the Investment Tax Credit/ITC) required energy storage to be paired with solar generation to qualify for tax credits. The IRA now allows standalone battery storage to claim the ITC, enabling broader deployment for grid resilience and backup power.
Increased financial incentives
The IRA raises the base ITC to 30% (from 26% under prior law) and extends it through 2032. Projects meeting domestic content requirements can receive an additional 10% credit, while those in low-income areas or energy communities may qualify for further 10-20% bonuses, potentially totaling 70% in combined credits.
Long-term stability
Earlier policies provided short-term extensions (1-2 years) of renewable incentives, creating market uncertainty. The IRA locks in the 30% ITC for a decade, giving developers confidence to pursue large-scale, standalone storage projects.
Key Comparison Table
| Feature | Pre-IRA Policies | IRA Provisions |
|---|---|---|
| Storage Eligibility | Solar-coupled only | Standalone allowed |
| Base ITC Rate | 26% (phasing down) | 30% fixed until 2032 |
| Bonus Availability | Limited/none | Up to 40% in add-ons |
| Market Certainty | Short-term extensions | 10-year guaranteed |
This policy shift is projected to accelerate storage deployments by addressing historical barriers to financing and project scalability.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-inflation-reduction-act-compare-to-previous-policies-in-terms-of-support-for-energy-storage-2/
