Thermal power storage investment code

Which energy storage property is eligible for section 48 ITC?

The IRA expanded the list of property eligible for the Section 48 ITC to include standalone energy storage technology. This includes electrical energy storage property, thermal energy storage property, and hydrogen energy storage property.

Is energy storage technology eligible for the ITC?

With respect to energy storage technology, Treasury and the IRS alleviated some taxpayer concerns by confirming that energy storage technology is eligible for the ITC if it satisfies the requirements of Section 48, even if it is co-located with or shared by a facility that is otherwise eligible for tax credits under Sections 45, 45V, or 48.

What energy storage technology is included in IRA Section 48?

The IRA amended section 48 to include standalone energy storage technology. This includes electrical energy storage property, thermal energy storage property and hydrogen energy storage property.

What is thermal energy storage property?

Thermal energy storage property is property comprising a system that is directly connected to a heating, ventilation, or air conditioning (HVAC) system; removes heat from, or adds heat to, a storage medium for subsequent use; and provides energy for the heating or cooling of the interior of a residential or commercial building.

What equipment is eligible for thermal energy storage?

The Final Regulations clarify the requirements for thermal energy storage property. Equipment that adds or removes heat (e.g., heat pumps) is eligible, but equipment that transforms other forms of energy into heat (e.g., through combustion or electric resistance) is not eligible.

What are the proposed regulations for section 48 investment tax credit?

The proposed regulations are discussed in the PwC Insights Proposed regulations define energy property for Section 48 investment tax credit and Regulations propose special rules on Section 48 energy property, credit bonuses.