To be eligible for federal incentives for energy storage, specifically the Residential Clean Energy Credit, the following requirements must be met:
- System Capacity: The battery storage system must have a capacity of at least 3 kilowatt-hours (kWh) to qualify.
- Property Type: Both principal residences and second homes qualify for the credit. Rentals do not qualify. The system must be installed in a dwelling unit located in the United States and used as a residence by the taxpayer.
- New and Unused: The battery storage technology must be new and previously unused to qualify for the tax credit.
- Installation Costs: Labor costs associated with the installation of the battery storage system are also eligible for the tax credit.
- Tax Credit Period: For installations between 2022 and 2032, a 30% tax credit is available. The credit percentage phases down in subsequent years, with it becoming 26% in 2033 and 22% in 2034.
To claim the credit, homeowners must file IRS Form 5695 and report the costs of the new clean energy property for the tax year when it is installed.
Additionally, homeowners should ensure that any subsidies or rebates received from utilities or other sources are properly accounted for when calculating qualified expenses for the tax credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-eligibility-requirements-for-federal-incentives-for-energy-storage/
