The Inflation Reduction Act (IRA) signed into law in August significantly improves the economics for large-scale battery storage projects in the U.S. For the first time, standalone storage systems will be eligible for a 30 percent investment tax credit (ITC) — and up to 70 percent with additional incentives.
“It’s a really big deal,” said Peter Cavan, Director of Market Development for battery storage developer Convergent Energy and Power. “Previously federal tax credits were only available for storage when it was paired with renewable generation, like solar. This change will likely drive up to $1 trillion in storage investments by the early 2030s.”
From an investment standpoint, the potential impact of the IRA is largely due to the mid-term certainty it creates. Rather than renewing investment and production tax…