The 21st century gold rush is on the horizon as individuals, businesses and utilities go all out to install energy storage systems using the new storage investment tax credit (ITC) included in the IRA. For the first time, batteries do not have to be installed with solar panels or charged with solar panels to receive tax credits. Systems of all sizes, from residential backup to grid-scale peak auxiliaries, can access 30% ITC.
This development should transform the storage market just as the solar ITC, introduced 15 years ago, boomed the industry.
“This ITC [storage] Jennifer Gallegos, Director of Strategic Sales and Communications for a panel-level battery manufacturer, said: Yotta Energy.
As stated in the IRA, Storage ITC is available for batteries above 3 kWh in the residential market and for batteries above 5 kWh in the commercial market. Details will be formally determined by the Treasury Department over the next few months, but the development is already changing sales conversations across the country.
Online Install Marketplace energy sage has been providing energy system quoting to stakeholders for over a decade and has seen an increase in interest in batteries over the past decade. EnergySage asked his website visitors browsing solar quotes if they were also interested in energy storage. CEO Vikram Aggarwal says his 70% of solar customers have consistently said yes over the past few years.but it is not always translated Installing the actual battery.
“There is a lot of interest, but the price remains high. Adoption is still fairly low as the price remains high and the economic benefits are unclear. 70% said they were interested. of which only 18% end up making a purchase [storage]said Agarwal.
A new storage ITC could change that.
“Pre-IRA, it was a tough decision. Not only is it expensive, but you can’t get an ITC,” Aggarwal said. “Things will definitely change post-IRA. For example, someone thinking about generators might consider standalone storage. VPP program Or a market demand response program that could favor batteries from generators. ”
While storage-only installations are on the rise, batteries in combination with renewable energy sources are still a worthwhile investment, especially now that financing doesn’t need to be tied.Jeff Chester, Global Co-Head of Energy Project Finance at Law Firm greenberg traurig, said more storage would be installed alongside wind power, providing more grid resilience in far-flung locations. , there was no ITC for enforcing pair storage. These colocation storage installations can now claim ITC.
“When it comes to solar power, we tend to combine solar power with storage batteries, even though there are constraints. “We are now able to operate the battery independently of the solar project.
To take advantage of this open market, Aggarwal said, residential solar installers should market batteries that meet consumer needs rather than adding batteries just because they have tax credits. said. While solar is primarily a financial decision, storage offers a more attractive resilience aspect in certain markets. However, cost savings are always the best.
“Consumer education is key to unlocking market demand. Installers have the view that they can sell [batteries] For your safety, it is highly resilient. For some consumers, that may work,” Aggarwal said. “If customers are interested in batteries for economic benefit, what markets will ITC and VPP actually benefit economically? Add resiliency benefits and position them as such As adoption rates move from early adopters to mass adopters, people will want to know what else the battery does.”