To qualify for the 30% tax credit for energy storage projects, the requirements can vary depending on whether the project is residential or commercial. Here are some specific requirements for both contexts:
Residential Energy Storage Tax Credit
- Qualified Property: The energy storage technology must be a qualified clean energy property for residential use. This includes battery storage systems with a capacity of at least 3 kilowatt-hours.
- Installation Period: The property must be installed between January 1, 2023, and December 31, 2032, to qualify for the full 30% credit. After 2032, the credit phases down to 26% in 2033 and 22% in 2034.
- Filing Requirements: Homeowners must claim the credit using IRS Form 5695.
- Location and Use: The system must be installed in a residence located in the United States.
Commercial or Business Energy Storage Tax Credit
- Section 48 Investment Tax Credit (ITC): For energy storage projects under 1 MW, businesses can claim a 30% base tax credit if they meet certain requirements.
- Section 48E: Starting January 1, 2025, new projects will fall under Section 48E, which maintains the 30% bonus rate if meeting prevailing wage and apprenticeship requirements.
- Prevailing Wage and Apprenticeship Requirements: Projects must pay prevailing wages and ensure adequate employment of apprentices from registered programs to qualify for the bonus rate.
- Domestic Content Requirements: Larger projects (over 1 MW) may need to meet domestic content requirements for certain materials to avoid reduced credit amounts.
- Filing Requirements: Businesses will claim this credit using Form 3468.
In both cases, used or previously owned systems do not qualify, and qualified expenses include equipment and labor costs for installation.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-for-energy-storage-projects-to-qualify-for-the-30-tax-credit/
