Incentives for Energy Storage Projects
1. Investment Tax Credit (ITC) for Standalone Energy Storage
- 30% ITC: Available for standalone energy storage facilities, including those not co-located with renewable generation.
- Potential for up to 70% ITC: Projects meeting prevailing wage and apprenticeship requirements can receive enhanced credits. Additional bonuses apply for domestic content, energy community locations, and low-income projects.
2. Transferability and Direct Payment
- Transferability: Allows tax credits to be transferred to entities with greater tax liability, simplifying financing and offering more flexibility for investors.
- Direct Pay Option: State or local governments can receive refund checks for their projects, enabling them to benefit without tax obligations.
3. Prevailing Wage and Apprenticeship Requirements
These requirements must be met to maximize tax credits, ensuring good-paying jobs and apprenticeship opportunities.
4. Eligible Components and Systems
The IRA expands eligible components for tax credits, including interconnection systems and microgrid controllers.
5. Energy Communities and Low-Income Incentives
Projects in energy communities or low-income areas may receive additional credits, promoting economic development in these regions.
6. Domestic Content Bonus
A 10% bonus ITC applies for projects using domestically produced components, supporting local economies.
These incentives together create a robust framework for energy storage development, making large-scale battery projects more economically viable and driving investment in the sector.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-new-incentives-for-energy-storage-projects-under-the-ira/
