Both battery storage and solar panels qualify for federal tax credits in the United States, but there are differences in their application and eligibility.
Solar Panels
- Tax Credit Percentage: Solar panels are eligible for the same Residential Clean Energy Credit, which offers a tax credit of 30% for properties placed in service from 2022 through 2032.
- Eligibility: Both new and existing homes qualify, including principal residences and second homes. Rentals do not qualify.
- Installation Requirements: Solar installations must be newly installed and not previously used.
Battery Storage
- Tax Credit Percentage: Battery storage systems with a capacity of at least 3 kilowatt-hours also qualify for a 30% tax credit for installations placed in service from 2022 through 2032.
- Eligibility: Both new and existing homes qualify, including principal and second homes. Renters can claim the credit if they live in the property part of the year, but landlords cannot claim it for rental homes.
- Installation Requirements: The battery storage must be new, unused, and installed after December 31, 2021. Labor costs associated with installation are also eligible for the tax credit.
Comparison Table
| Feature | Solar Panels | Battery Storage |
|---|---|---|
| Tax Credit Percentage | 30% | 30% |
| Eligible Homes | Principal & second homes | Principal, second homes, and partial occupant renters |
| Minimum Capacity | None | 3 kWh |
| Installation Requirements | New installation required | New installation required. Labor costs qualified |
| Geographical Limitation | Home must be in the U.S. | Home must be in the U.S. |
In summary, both solar panels and battery storage receive a 30% tax credit, but battery storage requires a minimum capacity of 3 kWh and allows renters to claim the credit if they reside in the property. Solar panels do not have a minimum capacity requirement but are limited to homeowners.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-tax-credit-for-battery-storage-compare-to-that-for-solar-panels/
