The Inflation Reduction Act (IRA) has introduced several changes to the Section 25D Residential Clean Energy Property Credit, particularly relevant for homeowners with energy storage. Key changes include:
- Extension and Enhancement: The IRA extended the Section 25D credit through 2034, with the credit percentage beginning to phase down in 2033 to 26% and further to 22% in 2034. The credit is no longer available for property placed in service after December 31, 2034.
- Energy Storage Eligibility: Beginning January 1, 2023, homeowners can claim a 30% credit under Section 25D(a)(6) for standalone energy storage systems with a capacity of 3 kWh or more. This provision allows for energy storage to be eligible for the credit even if it is not installed concurrently with solar generation.
- Previous Limitations Removed: Prior to these changes, energy storage was only eligible for the Section 25D credit when installed with solar generation or as a retrofit to existing solar systems. The IRA has broadened eligibility to include standalone energy storage systems.
These updates aim to incentivize the adoption of clean energy technologies, including energy storage, in residential settings.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-changes-were-made-to-the-section-25d-credit-for-homeowners-with-energy-storage/
