Proposed Tax Credit Structure Disincentivizes Battery Storage Adoption for Low-Income Americans

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Starting in 2025, power storage belongings will not qualify for the Low-Earnings Communities Bonus Credit score

WASHINGTON, D.C. — In the present day the Photo voltaic Vitality Industries Affiliation (SEIA) filed comments on proposed rules for the Low-Earnings Communities Bonus Credit score because it transitions to the technology-neutral tax credit score construction in 2025.

Beneath the proposed rule, starting in 2025, storage belongings will not qualify for the profit, presenting pink tape and complications for residential and group photo voltaic corporations and storage accessibility points for photo voltaic prospects.

The bonus credit score encourages companies to put money into photo voltaic initiatives that profit low-income communities and households, together with initiatives on Tribal land and as a part of reasonably priced housing developments. If companies meet the factors for the credit score, they may improve the worth of the technology-neutral funding tax credit score by as much as 20 proportion factors.

“As electricity demand soars, we should focus on removing barriers to solar and storage adoption, not adding them,” mentioned Abigail Ross Hopper, president and CEO of the Photo voltaic Vitality Industries Affiliation. “The proposed changes to the Low-Income Communities Bonus Credit in 2025 disincentivize storage adoption, missing an important opportunity to boost grid reliability and support the people and communities impacted by environmental injustice. This change is out of step with the intention of the bill, and we urge the administration to address this before finalizing.”

Primarily based on earlier proposed guidelines addressing the technology-neutral tax credit, which SEIA also commented onthis newest proposed change presents new administrative and contracting prices for residential and group photo voltaic companies and reduces shopper alternative. These proposed guidelines, if finalized, would make storage a much less enticing possibility for owners and companies, creating new obstacles for the communities this system is meant to assist. As well as, these actions diminish the broader effort to enhance grid reliability and buyer resilience with extra power storage belongings on the grid.

For the reason that Low-Earnings Communities Bonus Credit score Program was carried out in 2023, the U.S. Department of the Treasury has received more than 50,000 applications totaling 1.5 gigawatts of photo voltaic capability to assist decrease revenue People. Whereas Treasury didn’t publish the variety of functions that embrace storage, 13% of residential solar installations included storage in 2023and that proportion is anticipated to double by 2028.

This extremely fashionable program is a part of the clear power incentives within the Inflation Discount Act.

Courtesy of UNTIL.