Credit: DSD Renewables
On October 3, the Solar Energy Industries Association (SEIA) submitted comments on proposed rules for the Low-Income Community Bonus Credit as it transitions to the technology-neutral tax credit structure in 2025.
Under the proposed rule, storage assets will no longer be eligible for the benefit beginning in 2025, creating red tape and headaches for private and community solar companies and issues with storage accessibility for solar customers.
The incentive credit encourages companies to invest in solar projects that benefit low-income communities and households, including projects on tribal lands and as part of affordable housing developments. If companies meet the criteria for the credit, they can increase the value of the technology-neutral investment tax credit by up to 20 percentage points.
“As demand for electricity soars, we should focus on removing barriers to solar and storage adoption, not adding them,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association . “The proposed changes to the 2025 bonus credit for low-income communities discourage storage adoption, missing an important opportunity to increase the reliability of the electric grid and support the people and communities affected by environmental injustice. This change is not in line with the intent of the bill, and we urge the government to address this before the bill is finalized.”
Based on previous proposed rules regarding the Technology Neutral Tax Credits, which SEIA also commented on, this latest proposed change will impose new administrative and contracting costs on residential and community solar companies and reduce consumer choice. These proposed rules, if finalized, would make self-storage a less attractive option for homeowners and businesses, creating new barriers for the communities the program is designed to support. Additionally, these actions diminish broader efforts to improve grid reliability and customer resiliency with more energy storage assets on the grid.
Since the Bonus Credit Program for Low-Income Communities was implemented in 2023, the U.S. Treasury Department has received more than 50,000 applications for a total of 1.5 gigawatts of solar capacity to support lower-income Americans. Although the Treasury Department has not published the number of applications that include storage, 13% of residential solar installations included storage in 2023, and that percentage is expected to double by 2028.
This very popular program is part of the clean energy incentives in the Inflation Reduction Act.
News item from SEIA