Energy storage income code

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.

Are energy storage installations eligible for ITC?

Energy storage installations that are placed in service after Dec. 31, 2022, and begin construction prior to Jan. 1, 2025, are entitled to the existing ITC under Section 48 (a).

Is energy property eligible for a section 48 credit?

The current Income Tax Regulations at § 1.48–9, which provide definitions and eligibility rules for determining whether property is energy property eligible for the section 48 credit, were published on January 23, 1981 (T.D. 7765, 46 FR 7287 ).

Will section 48 add additional types of energy property?

Because future legislation may add additional types of energy property to section 48, proposed § 1.48–9 (e) (13) would provide that any other property specified by section 48 as energy property is treated as energy property for purposes of these proposed regulations.

Which energy storage technology qualifies for section 48E?

Any energy storage technology that qualifies under Section 48 also will qualify under Section 48E; this is a different standard than emission-based measurement for generation, which requires zero or net-negative carbon emissions.

What is the ITC rate for energy storage projects?

Energy storage installations that begin construction after Dec. 31, 2024, will be entitled to credits under the technology-neutral ITC under new Section 48E (discussed below). The base ITC rate for energy storage projects is 6% and the bonus rate is 30%.