Do energy storage projects qualify for a bonus rate?
Energy storage projects (i) not in service prior to Jan. 1, , and (ii) on which construction begins prior to Jan. 29, (60 days after the IRS issued Notice -61), qualify for the bonus rate regardless of compliance with the prevailing wage and apprenticeship requirements.
What is the base tax credit for energy projects?
• For projects beginning construction on or after Jan. 29, or where the maximum net output is 1 MW or greater, the base tax credit is 6% of the taxpayer’s basis in the energy property or qualified facility (or energy storage technology).
What is the ITC rate for energy storage projects?
Energy storage installations that begin construction after Dec. 31, , 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%.
What is the threshold percentage for energy storage technology?
For energy storage technology that begins construction in , the threshold percentage is 55%. The percentage increases by 5% per year until it reaches 75% for energy storage that begins construction after .
Are energy storage projects exempt from prevailing wage and apprenticeship requirements?
Two exemptions from the prevailing wage and apprenticeship requirements exist: Smaller-scale energy storage projects (under 1MW of storage capacity) qualify for the 30% bonus rate regardless of compliance with the prevailing wage and apprenticeship requirements.
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.
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Discussion & Message Board
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