Proposed Tax Credit score Construction Disincentivizes Battery Storage Adoption for Low-Earnings People – CleanTechnica – Uplaza

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Starting in 2025, power storage property will now 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 feedback on proposed guidelines for the Low-Earnings Communities Bonus Credit score because it transitions to the technology-neutral tax credit score construction in 2025.

Underneath the proposed rule, starting in 2025, storage property will now not qualify for the profit, presenting crimson tape and complications for residential and neighborhood photo voltaic corporations and storage accessibility points for photo voltaic clients.

The bonus credit score encourages companies to spend money on 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 standards for the credit score, they might enhance 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.”

Based mostly on earlier proposed guidelines addressing the technology-neutral tax credit, which SEIA additionally commented on, this newest proposed change presents new administrative and contracting prices for residential and neighborhood photo voltaic companies and reduces shopper alternative. These proposed guidelines, if finalized, would make storage a much less engaging possibility for owners and companies, creating new boundaries for the communities this system is meant to help. As well as, these actions diminish the broader effort to enhance grid reliability and buyer resilience with extra power storage property on the grid.

Because the Low-Earnings Communities Bonus Credit score Program was carried out in 2023, the U.S. Division of the Treasury has acquired greater than 50,000 functions totaling 1.5 gigawatts of photo voltaic capability to help decrease revenue People. Whereas Treasury didn’t publish the variety of functions that embody storage, 13% of residential photo voltaic installations included storage in 2023, and that proportion is anticipated to double by 2028.

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

Courtesy of SEIA.