Research on tax issues for energy storage companies

Will a tax credit be available for energy storage projects?

However, with the passage of the Inflation Reduction Act of 2022, tax credits are now available for standalone energy storage systems, and thus lenders may be willing to provide bridge capital that is underwritten based on the receipt of proceeds from an anticipated tax equity investment, similar to renewable energy projects.

How will state taxes affect renewable generating companies?

This increase in renewable generating companies will have state tax implications. “States may impose several taxes on renewable generation companies, including income tax, franchise tax, capital stock tax, gross receipts tax, property taxes and sales and use taxes,” Wade and Herzberg wrote.

What technology risks are associated with energy storage systems?

Technology Risks Lithium-ion batteries remain the most widespread technology used in energy storage systems, but energy storage systems also use hydrogen, compressed air, and other battery technologies. Project finance lenders view all of these newer technologies as having increased risk due to a lack of historical data.

How did the 2009 E-Directive affect energy storage Finance and investment decisions?

In Europe, the 2009 Electricity Directive (hereinafter 2009 E-Directive) hindered energy storage finance and investment decisions ( Directive, 2009 ).

Should energy storage be a private sector investment?

The majority of our respondents believed that investments in energy storage will be driven by the private sector although several respondents believed that a mixed consortium of investors would be wise in order to avoid the development of monopoly interests or transient investors controlling the market a view echoed by (Crampes and Moreaux, 2010).

Does energy storage reduce energy costs?

While the survey respondents mostly agree that energy storage is a good method of reducing costs to end customers, a study using Irish data concluded that energy storage reduces production costs, but leads to a greater increase in wholesale electricity prices, and therefore increases costs to consumers (Nyamdash and Denny, 2013). Fig. 3.