IRS rules energy storage upgrade to solar ITC eligible

Tesla PV Battery Southern California
March 30, 2018

The IRS published a Private Letter Ruling last Friday, responding to a request to determine whether, the cost of installing energy storage to be integrated into a residential PV system would qualify as a “qualified solar electric property expenditure” eligible for the Investment Tax Credit (ITC).

The agency noted that the energy storage system in question has software that controls the battery such that charging only occurs when the PV system is producing energy and only up to the solar array’s maximum output.

The letter referenced that the IRS has already ruled that when installing a solar water heating system, the hot water tank itself was also included in the 30% ITC tax credit if at least half of the energy used in the tank was from sunlight.

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