What taxes will the energy storage industry pay

Will the inflation Reduction Act affect energy storage projects?

Image: President Biden via Twitter. The Inflation Reduction Act’s incentives for energy storage projects in the US came into effect on 1 January 2023. Standout among those measures is the availability of an investment tax credit (ITC) for investment in renewable energy projects being extended to include standalone energy storage facilities.

Are energy storage projects eligible for a bonus credit?

Domestic Content – IRS Notice 2023-38 (May 12, 2023) An energy storage project (among others) is eligible for an “adder” bonus credit (generally an additional 10% ITC) if it satisfies US Federal Transit Administration–based “Buy America Requirements” for domestic content.

Do energy storage projects receive additional credit?

An energy storage project (among others) located in an “energy community” receives an “adder” additional credit (generally an additional 10% ITC). The energy community guidance provides definitional rules for each of the three categories of energy communities (Brownfield Category, Coal Closure Category, and Statistical Area Category).

Will the Internal Revenue Code of 1986 change the energy storage industry?

Specific to energy storage, the act’s changes to the Internal Revenue Code of 1986, as amended (Code), have the potential to be a game-changer for the energy storage industry in the United States, in terms of both deployment and equipment manufacture.

Can a PTC-electing energy production facility be paired with an energy storage facility?

Principally, this means that a PTC-electing eligible energy production facility (such as a solar facility now eligible to elect to use the PTC after the IRA) may be paired with an energy storage facility without impacting the ability to claim an ITC for the storage facility.

Will Trump's tariffs drive up energy costs?

Experts say that when it comes to clean energy, Trump's tariffs stand to drive up costs for U.S. companies.