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There are three broad and interrelated methods that are used in valuation efforts: the cost approach, market approach, and income approach.These are merely benchmarks – they are not safe harbors and they are not ceilings. “Treasury/IRS policy is that they don’t issue rulings on issues where they’re writing the regulations. thank you – JimIn a smart grid these thousand(s) ESS units could be called upon to serve the grid with frequency regulation, grid smoothing and regulation and do it in milliseconds to seconds instead of minutes and up to an hour for many ‘fueled’ generation facilities.“In a world where investors want absolute certainty and clarity, we think this works, but the IRS never said that,” he said.

The federal solar tax credit, also known as the Solar Investment Tax Credit, or ITC, is the single most important solar incentive available in the United States. “This could result in only expiring provisions being considered, because they tend to have bipartisan support and are relatively non-controversial. Moreover, the income approach should explicitly address the allocation of the estimated discounted cash flows to the eligible property.  Once the ITC is claimed though, battery owners can charge the system however they like.So, stay tuned. Jenner wanted to reiterate that the rollercoaster ride of getting tax legislation approved that includes an energy storage ITC clause has nothing to do with the national support of renewable energy.Kelly – are there any battery technologies like Vanadium Redox Flow Batteries or others that would benefit from this legislative change?

It’s a far broader question than energy storage. As of 2020, the ITC has begun to decline: the investment tax credit currently a credit of 26 percent of the cost of your solar–or solar + storage–installation.

“I continue to be incredibly excited by the potential for innovative energy storage technologies to improve the efficiency, reliability and resilience of our electric delivery systems that power homes and businesses. The owner may also submit a detailed and credible third-party appraisal (discussed below) demonstrating that the claimed basis is consistent with a market transaction between unrelated parties with adverse economic interests.Treasury’s Section 1603 review team will accept a cost approach that includes only eligible property and a markup (“developer’s premium”) that is consistent with industry standards and with the scope of work for which the markup is received. Just a thought.

In the future the utilities will probably realize a thousand(s) small ESS units that the utility doesn’t have to repair, maintain or pay for can help the utility by enabling their ‘fueled’ generation plants to run more in a generation mode that sells power to the grid, instead of burning fuel for several hours to keep the plant able to ‘ramp up’ to meet grid power demands.A 2013 IRS ruling stated that an energy storage device could receive the ITC if it was installed as part of the original solar system. 22% for systems installed in 2021.