With the United Nations climate summit going on in Glasgow, U.K. this week and next, it is apparent that governments across the globe are making overdue efforts to curtail climate change to the best of their abilities. New regulations, funding, legislation and incentives are popping up in nations worldwide, including the U.S. Policy makers, clean energy advocates and industry groups have been urging that congress establish an investment tax credit (ITC) incentive for energy storage. These groups may get their wish soon.
What is the investment tax credit for energy storage systems over 5kWh?
A new tax credit for energy storage systems was included in a House of Representatives’ federal budget draft in September. It was included in the House Ways & Means Committee Committee Print for Subtitle G. This is a section dedicated to green and renewable energy and energy efficiency incentives.
The ITC would apply to batteries or other energy storage technologies that have a minimum capacity of 5kWh. These systems would be eligible for a 6 percent base credit rate or a 30 percent bonus credit rate. Systems are eligible only if their construction is started before 2033 and they are in service before 2036.
In addition to the tax credit for energy storage systems, the budget draft also includes incentives to manufacture within the U.S. and an extension of the solar investment tax credit. The current Solar ITC at 30 percent would be extended for another 10 years and a bonus for domestic content could increase the tax credit value to 40 percent.
If passed into law, the investment tax credit for energy storage systems will add a financial incentive on top of benefits already associated with energy storage systems. These benefits include onsite power storage and a reduced reliance on the local grid along with disaster recovery in case of emergency. To read more about the benefits associated with energy storage systems click here.
It may be some time before these incentives are passed into law. However, congress does not require a full majority in both the House of Representatives and the Senate because it is pursuing the tax credit through a budget reconciliation.
Interested in installing an energy storage system?
If you are interested in taking advantage of the investment tax credit for energy storage systems and installing this technology at your facility EnergyLink’s team of experts is here to help. EnergyLink’s extensive experience in the designing, building and funding phases of energy project installations has prepared them to guide you along each step in this process. To get started on your next energy storage project click the link below for a free product quote. If you would like to speak to an EnergyLInk team member dial (866) 218-0830.