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INCENTIVES & PROGRAMS

Federal Storage ITC

Bookmark This Page for Updates On an Important Incentive

The Build Back Better (BBB) act was upended at the end of 2021 when Senator Manchin (D-WV) declared that it would not garner his support. Since then, the Senate has pivoted to voting rights legislation and filibuster reform. Few talks have occurred in the near year pursuant to reviving the current BBB.

However, the consensus in Washington D.C. remains that there is still a potential opportunity to get at least the climate and clean energy provisions (e.g. Standalone Storage ITC) enacted in 2022. (Even Senator Manchin recently remarked that the climate provisions enjoy some of the strongest support within the Democratic Conference!) For that to occur, the next steps would be for Senator Manchin to reengage in negotiations and find consensus with Majority Leader Schumer, the White House, and the rest of his Democratic colleagues. To that end, some of the more contentious social spending provisions may have to be dropped in order to secure his vote. Ultimately, we hope to see significant progress being made on a narrower package by the time President Biden gives the 2022 State of the Union Address on March 1st. It is important to note that this is a midterm election year, so the longer these negotiations drag on, the lower the likelihood that these provisions get enacted.

The bottom line is BBB in its old form will not pass. However, there is still a change that some of the more popular provisions (e.g. clean energy tax title) could pass in a smaller, narrower bill. Time will tell.

This page will be updated as more details become available, so please check back often. In the meantime, there continues to be a tremendous amount of growth in demand for front-of-the-meter and behind-the-meter energy storage across many states. For specific questions on how the storage ITC might affect your energy storage project, contact Stem using the form below.

Video: The Latest ITC Updates (As of 9/16/2021)

What is it?

An investment tax credit (ITC) reduces an entity’s tax liability by a specified percentage of the ITC-eligible investment. When offered as a direct, immediate payment (“direct-pay” option), as is currently proposed for the storage ITC, it is also available to tax-exempt entities. The federal ITC for solar energy, introduced in 2006, was a major catalyst for the tremendous growth of solar in the U.S.

Currently, energy storage is only eligible for a federal ITC when it is paired with solar. A “standalone storage ITC” (or simply a “storage ITC”) would make investments in standalone storage systems ITC-eligible and likely stimulate additional investment in energy storage projects. Analyst firm Wood Mackenzie predicts that a 30% storage ITC would increase U.S.-wide energy storage deployments by 20% or more.

Download Stem’s Frequently Asked Questions document about the storage ITC (updated 9/16/2021).

Why is the storage ITC important?

More investment in energy storage increases the benefits storage can provide to energy users and the grid. Energy storage is enabling hospitals and critical facilities to function despite power outages; schools and businesses to save on their electricity bills; and electric utilities to add more intermittent renewable energy onto their systems. A storage ITC would also create jobs and strengthen America’s energy storage industry.

A storage ITC would improve project economics across the board. Projects that are already economically attractive would become more so, while other projects would become viable in both new and existing markets. Wood Mackenzie estimates that a 30% storage ITC would improve project internal rates of return (IRRs) by roughly 5%.

Existing energy storage markets in California, Hawaii, Massachusetts, and New York would likely expand, while storage deployments in emerging markets would likely accelerate nationwide.

How Would the ITC Affect Your Project?

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How might the storage ITC impact you?

If you’re an energy consumer…

A storage ITC would make both standalone storage and solar plus storage projects more appealing, and would be incremental to some state incentives as well as the 10-30% utility bill savings that energy storage systems typically provide. The ITC would also enable organizations to get more value from efforts to avoid power outages, reduce GHG emissions, and demonstrate sustainability and ESG leadership.

To learn more about how the storage ITC could jump-start your organization’s clean energy strategy, contact Stem today!

If you're a developer or EPC...

A storage ITC would create a tremendous opportunity to retrofit existing solar systems with energy storage and offer a new value proposition to customers you already know well. It would also provide critical support to the energy storage industry and significantly expand partnership opportunities for solar developers and storage providers for years to come.

To learn more about how the storage ITC could enable you to sell more energy storage with Stem, contact us today!

Contact your representatives!

Hearing from business and community leaders is so important for legislation like this. A storage ITC would make America’s power system more reliable and cost-effective while supporting broader societal goals around climate, resilience, and job creation. Please contact your representatives and let them know you support a federal ITC for energy storage!

Why partner with Stem?

Stem is a global leader in AI-driven energy storage systems, with more than a decade of experience partnering with organizations and developers to realize hundreds of successful projects. Stem pioneered energy storage in markets across North America by helping our customers and partners understand, qualify for and maximize eligible incentives including the solar ITC. Our expert team is closely tracking developments with the storage ITC and how they would affect energy storage projects in different U.S. markets. 

If you’re interested in capitalizing on the storage ITC, contact Stem today. As a longtime energy storage market leader, our experts would be happy to answer your questions and design an energy storage system that works for you.

Featured Resources

Whitepaper

Federal Opportunities to Leverage Energy Storage

Download Whitepaper
Blog

What Biden’s American Jobs Plan Means for Energy Storage

Read the Blog
Blog

What a Standalone Storage ITC Means for a Resilient Future

Read the Blog

Let's talk.

Contact the experts at Stem and learn how smart storage can power your business forward.

Stem HQ: 100 California St 14th Floor San Francisco, CA 94111

For Support or Sales inquiries, call 877-374-7836(STEM).

  • You may unsubscribe from these communications at any time. For more information on how to unsubscribe, our privacy practices, and how we are committed to protecting and respecting your privacy, please review our Privacy Policy.

Let's talk.

Contact the experts at Stem and learn how smart storage can power your business forward.

Stem HQ: 100 California St 14th Floor San Francisco, CA 94111

For Support or Sales inquiries, call 877-374-7836(STEM).

  • You may unsubscribe from these communications at any time. For more information on how to unsubscribe, our privacy practices, and how we are committed to protecting and respecting your privacy, please review our Privacy Policy.

Let's talk.

Contact the experts at Stem and learn how smart storage can power your business forward.

Stem HQ: 100 California St 14th Floor San Francisco, CA 94111

For Support or Sales inquiries, call 877-374-7836(STEM).

  • You may unsubscribe from these communications at any time. For more information on how to unsubscribe, our privacy practices, and how we are committed to protecting and respecting your privacy, please review our Privacy Policy.

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Federal

Solutions

Athena

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