Us energy storage subsidy policy in 2025

What are the different types of energy storage policy?

Approximately 16 states have adopted some form of energy storage policy, which broadly fall into the following categories: procurement targets, regulatory adaption, demonstration programs, financial incentives, and consumer protections. Below we give an overview of each of these energy storage policy categories.

Are energy storage installations eligible for ITC?

Energy storage installations that are placed in service after Dec. 31, 2022, and begin construction prior to Jan. 1, 2025, are entitled to the existing ITC under Section 48 (a).

Are energy storage projects eligible for a refundable ITC?

Energy storage projects owned by taxable entities are not eligible for a refundable ITC, but instead can take advantage of the new transferability rules. The IRA added a provision to permit project owners (other than tax-exempt entities) to make an election to transfer the ITC to an unrelated third party.

Is battery energy storage a good investment opportunity?

Battery energy storage presents a USD 24 billion investment opportunity in the United States and Canada through 2025. More than half of US states have adopted renewable energy goals, such as California’s target of 100% clean energy by 2045.

What is the ITC rate for energy storage projects?

Energy storage installations that begin construction after Dec. 31, 2024, will be entitled to credits under the technology-neutral ITC under new Section 48E (discussed below). The base ITC rate for energy storage projects is 6% and the bonus rate is 30%.

How many GW of battery storage are there in the United States?

As of 2023, there is approximately 8.8 GW of operational utility-scale battery storage in the United States. The installation of utility-scale storage in the United States has primarily been concentrated in California and Texas due to supportive state policies and significant solar and wind capacity that the storage resources will support.