To qualify for federal incentives, battery storage systems must meet the following requirements:
- Capacity Requirement: The battery storage system must have a capacity of at least 3 kilowatt-hours (kWh) to be eligible for the federal incentives.
- Installation Period: For the full 30% tax credit, the system must be installed and placed in service between January 1, 2022, and December 31, 2032. After this period, the credit phases down to 26% for installations in 2033 and 22% for 2034.
- New and Unused Equipment: The battery storage technology must be new and previously unused. Used or repurposed equipment does not qualify.
- Installation Location: The system must be installed in a dwelling unit located in the United States and used as a residence by the taxpayer. This can include a house, houseboat, mobile home, cooperative apartment, condominium, or manufactured home.
- Eligible Properties: Both principal residences and second homes qualify for the credit. However, rental properties do not qualify unless the owner uses them as a residence themselves.
- Tax Filing Requirement: To claim the credit, you must file IRS Form 5695 (Residential Energy Credits) with your tax return for the year the property was installed.
- Credit Calculation: The credit is 30% of the total cost, including labor for installation and any wiring or piping needed. There is no maximum dollar limit for this credit, but it is nonrefundable, meaning it cannot exceed the amount of your federal income tax liability.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-for-battery-storage-systems-to-qualify-for-federal-incentives/
