Applications: Battery Energy Storage Systems (BESS)

IRA Investment Tax Credit Guidelines In the U.S., the Inflation Reduction Act has been a huge boost to the renewables industry through the Investment Tax Credit, which offers incentives for construction of solar, wind, and storage projects by offering federal tax credits to offset a portion of the project’s cost. The original law had several vague provisions, which have been clarified by guidance that has gradually been issued by the Internal Revenue Service (IRS). The table below shows the tax credits described in the IRA, which gradually decline from 2022 to 2036. Although there is concern that the incoming Trump Administration would rescind these credits, this would require an Act of Congress, which is possible but difficult given the slim majorities held by the Republican Party in the U.S. Senate and House of Representatives.

* Actual phased down is based on the later of the dates shown or the year after electric sector CO2 emissions drop 75% below 2022 levels. ** Must include 100% domestic iron/steel and an increasing percent of manufactured goods over time. *** Allocated credits will be based on an application and award process that will have to be developed by the Secretary. Maximum of 1.8 GWdc/year. DCMS = Domestic Content Minimums; EC = Energy Community; Source: IRA, HR5376

Extracted from the PDF; charts and images may read imperfectly.