The Inflation Reduction Act (IRA) has substantially boosted energy storage project development in U.S. interconnection queues by improving project economics through expanded tax credits and policy support:
1. Standalone Storage Eligibility:
The IRA grants standalone energy storage systems access to a 30% Investment Tax Credit (ITC) for the first time, removing the previous requirement to pair storage with renewable generation. This policy shift has incentivized a surge in standalone project proposals, as developers no longer need to tether storage to solar or wind projects.
2. Enhanced Financial Viability:
The ITC’s increased rate (up to 70% with domestic manufacturing and labor incentives) reduces upfront costs, making storage projects more financially attractive to developers. Improved project returns have accelerated proposals entering interconnection queues, particularly for large-scale systems needed to meet the 100 GW by 2030 climate target.
3. Market Growth Projections:
Analysts estimate the IRA will drive 20–30% more energy storage deployments over the next decade, translating to thousands of projects entering planning and permitting phases. While exact queue data isn’t provided in the sources, industry leaders like Convergent Energy and Power predict $1 trillion in storage investments by the early 2030s, reflecting unprecedented project pipeline growth.
4. Grid Resilience and Flexibility:
The ITC’s expansion encourages storage solutions that enhance grid reliability, further motivating utilities and developers to prioritize storage in interconnection requests.
In summary, the IRA’s policy and financial mechanisms have catalyzed energy storage proposals, positioning the sector for rapid expansion in interconnection queues and long-term grid modernization.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-has-the-inflation-reduction-act-impacted-the-number-of-energy-storage-projects-in-interconnection-queues/
