Taxation of new energy storage industry
Nearly six gigawatts of utility-scale BESS were added in the first six months of 2025, and the EIA forecasts that more than 18 gigawatts will be built by the end of the year — about 80% more than 2024. . Technology-Neutral Credit: Section 48E establishes a technology-neutral investment tax credit (ITC) for clean electricity generation and qualified energy storage technologies placed in service after December 31, 2024. This means any energy storage technology qualifying under Section 48 also. . Battery storage is an increasingly important part of the US power system. According to the US Energy Information Administration (EIA), 10. [PDF Version]FAQS about Taxation of new energy storage industry
How has the energy storage industry progressed in 2024 & 2025?
The energy storage industry has continued to progress over the course of 2024 and into 2025, buoyed in significant part by the federal income tax benefits in the form of tax credits enacted under the Inflation Reduction Act of 2022 (IRA).
Are IRA tax benefits a viable option for energy storage facilities?
While the vitality of the IRA tax benefits in their current form is currently subject to uncertainty given the results of the 2024 federal general election, the existing market practice for financing energy storage facilities since the IRA's passage continues to evolve in reaction to the act's new requirements and opportunities.
What regulatory guidance has the government released on energy storage?
Of particular importance to the energy storage industry, the government has released final regulatory guidance for the ITC (both Section 48 and 48E of the Code), prevailing wage and apprenticeship (PWA) requirements, and transferability and direct payment, as well as other guidance on the energy community and domestic content tax credit “adders.”
What are the New IRA rules for energy storage?
Energy storage was one of the major beneficiaries of the IRA's new rules on both the deployment and manufacturing sides. The IRA enacted the long-sought investment tax credit (ITC) under Section 48 and 48E of the Internal Revenue Code (the Code) for standalone energy storage facilities.
Green transformation of the power industry and energy storage
Sites in the United States and Australia are predominantly a story of battery storage and renewable energy. Europe's projects feature a diversified mix of clean power and alternative fuels, while Asian sites primarily use biofuels and hydrogen products. . Solar and wind not only kept pace with global electricity demand growth, they surpassed it across a sustained period for the first time, signalling that clean power is now steering the direction of the global energy system. Solar gained momentum in regions once seen as peripheral, from Central. . With increasing reliance on renewables, energy storage balances generation and consumption, particularly during peak hours and high-demand situations. Instead of merely retiring these plants, their infrastructure is being repurposed, and creative strategies are being used to deploy renewables, batteries, nuclear reactors. . Breakthroughs in battery technology are transforming the global energy landscape, fueling the transition to clean energy and reshaping industries from transportation to utilities. • The largest impact on reducing emissions in the near to medium term will come from building. . [PDF Version]