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Battery Storage Solutions Are Now Eligible For ITC

The federal investment tax credit, ITC, which has been a key component in helping thousands of companies afford to install solar for their facilities and lower electricity costs can now be applied to battery storage, as well.

This new development began January 1st of this year and will match the solar incentive of 26%. What this allows is a much more comprehensive approach to lowering the existing electricity bill as it will address both the supply and delivery costs incurred on a monthly basis.

There are a few caveats to bear in mind. The storage system must be tied to the grid as it may not qualify for incentives if it is a stand alone solution. Additionally, in order to receive the full 26% ITC the storage needs to be paired with either an existing solar solution or concurrently install a paired solar array. If there isn’t an associated solar array to go with the storage batteries then the qualifying ITC value drops by a quarter to 19.5%. This is still a significant percentage but it may be enough to determine whether or not the storage solution makes economic sense to install.

An interesting note of the storage solution is that the footprint is significantly smaller than that of a solar array and can be installed indoors within a space no larger than most freezers. Obviously, very large requirements will need a much larger physical install but it will still be less required space than that of a traditional pv rooftop solution.

Bear in mind, a battery storage solution is much different than a battery backup solution and one should not be confused with the other. A battery backup solution will require much different sizing and is determined by the load your environment uses taking into account the amount of backup time that suits you and your business.

A battery storage solution is one that, in this case, is grid-tied and the power is fed back into the grid at peak times to lessen the load on the grid. In most cases, this is managed by the power company. In turn, savings are shared by the owner and the power company.

Companies that have looked at solar, as recently as last year, should now take a moment to reevaluate the opportunity as it may prove to be much more cost-effective of a project at this time.

Of course, it is always recommended to consult with a tax advisor prior to making any decisions to ensure it is in the best interest of the company.


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