Energy storage systems will qualify for a tax credit in Maryland under a new law signed by the governor in May.
A tax credit can be claimed for 30 percent of the cost of new storage systems installed between 2018 and 2022. However, the credit is capped at US$5,000 for a residential system and US$75,000 for a commercial system. Maryland is the first state to offer a tax credit specifically for storage.
No more than US$750,000 in total credits may be claimed statewide in a year. Taxpayers must apply to the Maryland Energy Administration for a certificate authorizing them to claim credits. Certificates will be awarded on a first-come-first-served basis. If the maximum credit is claimed on each storage unit, the cap will support a maximum of 150 residential units or 10 commercial units a year, or a smaller number of each in a mixture of the two.
The state credits may not be carried forward if not used fully in the year the storage unit is installed.
A 30 percent investment tax credit can be claimed on batteries at the federal level, but only on batteries that are considered part of the electric generating equipment at a solar facility. Batteries installed as part of other renewable energy facilities may also qualify, but in more limited circumstances. (For more details, see “Batteries and Tax Credits” in the October 2016 NewsWire.) An industry proposal to allow tax credits on standalone storage at the federal level is facing long odds in the current Congress. (See “Tax Credits Proposed for Energy Storage” in the August 2016 NewsWire.)
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