People often ask if you are able to claim the solar investment tax credit for installing a solar battery backup for your home. The answer is YES you can! The main requirement is that you own your solar energy system. Depending if you are installing energy storage on a residential or commercial property will determine the amount of tax credit received.

There has been an increasing demand for installing solar energy systems alongside solar panels due to the Time of Use Plan. The time of use plan has lowered the value of solar panels by giving the homeowner less credit per kWh while the panels are producing and jacked up the price per kWh when the sun is down.

Residential Property Eligibility:

Energy storage for residential is eligible for the credit, as long as the batter is charged by solar energy system on-site. If you do not have solar installed and utilize the grid to charge the battery, it will not be eligible for the ITC credit.

Commercial Property Eligibility:

Commercial properties tax credit works in a different matter compared to residential properties. The energy storage system is eligible for the credit as long as the battery is charged by a renewable energy system more than 75 percent of the time. The tax credit amount is determined by how often the battery is charged by a solar energy system. To get the full tax credit amount, the battery needs to be charged by renewable energy at 100% of the time. If the battery is charged by renewable energy less than 100% of the time but more than 75% it will receive that portion.

If the battery is charged by a solar energy system 85% of the time, you will only receive 90% of the 30% ITC credit resulting in 27% (90% x 30% = 27%). If you paid $6,000 to install your energy storage battery system, you would be eligible for a $1620 tax credit ($6,000 x 27% = $1620).