Requirements for Qualification
- Capacity Threshold: Standalone energy storage systems with a minimum capacity of 5 kWh can qualify for the Investment Tax Credit (ITC) under Section 48(a)(3)(A)(ix) of the IRA.
- Prevailing Wage and Apprenticeship Requirements: To qualify for the bonus rate of 30%, projects must satisfy prevailing wage and apprenticeship requirements. This applies to both the base 6% ITC rate and the bonus rate.
- Construction and Service Dates: For projects that begin construction before January 1, 2025, the existing ITC under Section 48(a) applies. Projects starting construction after December 31, 2024, will be eligible for the new technology-neutral ITC under Section 48E.
- Domestic Content Requirements: Projects with capacities greater than 1 MW that begin construction after 2023 must meet domestic content requirements to avoid reductions in the refundable credit amount.
- Environmental Justice Credits: While standalone energy storage is not eligible for additional credits for projects located in low-income communities or on Indian land, energy storage attached to solar or wind projects can qualify for these benefits.
Compliance with Standards
Energy storage facilities must also comply with relevant safety and operational standards:
- National Electrical Code (NEC): Must adhere to NEC standards, particularly sections relevant to energy storage systems.
- NFPA 855: Provides guidelines for the installation of stationary energy storage systems.
- UL Standards: Components like batteries and inverters must be certified by organizations such as Underwriters Laboratories (UL).
- Siting and Safety Requirements: Facilities should adhere to siting guidelines that address fire safety, vegetation management, and distance from buildings.
By meeting these requirements, energy storage facilities can ensure compliance with regulations and potentially qualify for the applicable tax credits.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-for-energy-storage-facilities-to-qualify-for-the-ceic/
