Solar + Storage Tax Credits
June 15, 2016 | Online ::
In recent years, utilities and other load-serving entities (LSEs) have increasingly been evaluating battery storage resources as a supplemental technology to enhance the value of solar energy systems. These solar-plus-storage energy systems could potentially be the key to balance the intermittency of solar generation, providing greater grid reliability and enhancing solar energy’s value and flexibility as a resource.
The solar industry currently benefits from a 30% investment tax credit (ITC) and 5-year depreciation on solar generating equipment. These benefits combined are worth 56¢ per dollar of capital cost. Tax regulations written in 1982 define the scope of a qualifying projects. The Internal Revenue Service (IRS) has issued three private letter rulings in the last several years allowing the ITC to be claimed on storage facilities, added at original construction or later in time, to utility-scale projects and on batteries installed as part of solar rooftop facilities. At the same time, it has declined to rule in other cases. The IRS is sorting through 25 to 30 comment letters as it gears up to rewrite its regulations in this area. The issues, particularly around storage, are complicated. The new regulations are not expected until 2017 at the earliest.
This webinar will explore how to structure solar projects so that storage facilities are considered part of the solar facility that qualifies for an ITC and 5-year depreciation. It will also touch on the emerging economic models for storage.
- Evaluate how solar-plus-storage projects can qualify for federal tax credits and 5-year depreciation and how the IRS is likely to rewrite the rules in this area
- Assess how the outcome of the IRS proceedings will affect utility decisions around storage-plus-solar projects
- Examine some of the emerging economic models for storage
- State of play for tax benefits
- Current guidelines for battery storage eligibility
- What the IRS has allowed and where it has had problems
- Issues with which the IRS is wrestling as it rewrites its rules
- Assessment of likely and potential outcomes for IRS clarification on storage
- Overcoming Financial Barriers for Solar-Plus-Storage Projects
- The emerging economic models for storage
- Potential regulatory issues
- Opportunities for cost reduction strategies
- Assessing the Value Proposition to Utilities
Keith Martin, Partner, Chadbourne & Parke LLP
Keith Martin is a transactional lawyer whose principal areas of practice are tax and project finance. He acted for 140 companies last year and worked on transactions in the United States and five foreign countries. He also lobbies Congress and the Treasury Department on policy issues. He is co-head of the Chadbourne project finance group. The group has 94 lawyers and handled $43 billion in financings in 2015. Mr. Martin holds the sole “star” ranking among renewable energy lawyers in the United States from the prestigious Chambers directory based on year-round interviewing of peers at other firms and corporate law departments.
Kat Gamache, Counsel, Chadbourne & Parke LLP
Caileen Kateri (“Kat”) Gamache focuses on energy regulatory matters. She works with project developers, investors, utilities and financial marketers to find solutions to complex energy regulatory issues, translate ideas into operational projects, draft and negotiate material contracts and close deals. She routinely represents clients before the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC), state regulatory agencies, regional transmission organizations and independent system operators on matters arising under both federal and state statutes and implementing regulations.