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How To Save Money When Purchasing A Battery Storage System
Battery storage systems can allow you to avoid high utility prices during peak energy demand periods. See how you can take advantage of federal funding to purchase a battery storage system.
Background
A battery storage system is a built-in energy unit that can store electricity from the power grid or rooftop solar panels. Battery storage systems can store power from rooftop solar panels for use at night, or can be charged with solar or grid power to provide a source of backup electricity during power outages. By using stored electricity generated from solar panels or purchased from the grid when prices are low, battery storage systems can allow consumers to avoid high utility prices during peak demand periods and avoid certain utility fees. In addition, as part of the federal Inflation Reduction Act, you may be able to use a tax credit to purchase a battery storage system (see below).
Federal Tax Credit and Requirements
1. Battery Storage Technology Tax Credit
a. The tax credit of 30% of the installation cost is in effect through December 31, 2032. Expenses may include labor costs for onsite preparation, assembly, or original installation of the property and for piping or wiring to connect it to the home.
a. The Battery Storage Technology Tax Credit is part of the Residential Clean Energy Tax Credit. The Residential Clean Energy Tax Credit equals 30% of the costs of new, qualified clean energy property. Each year that you install eligible property, you can claim the maximum annual credit. See www.savingenergytips.org for additional opportunities to save money and save energy with tax credits.
b. To claim your tax credit, you will need to file Form 5695.
2. IRS Requirements
a. The battery storage system needs to be installed in the home that is your principal residence, or secondary residence if you live in the secondary residence part of the time and don’t rent it out to others. The residence, which must be in the U.S., can be a new or existing home, mobile home, manufactured home, cooperative apartment, condominium, or a houseboat.
b. The battery storage must be new and have a capacity of at least 3kWh.
If you or someone you know need help paying for utility bills or appliances — including air conditioning, you can contact Wildfire, a non-profit organization with partnerships across the state of Arizona. The Arizona Department of Economic Security (ADES), through the Low Income Energy Assistance Program (LIHEAP), offers additional help with utility bills for qualified households.
*Please note the above information taken from federal government websites is subject to change. We recommend checking the relevant website(s) for updates. We also recommend checking out our webpage for additional opportunities to save money and save energy: www.savingenergytips.org
For more information: [email protected] or (602)252-9227.
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Authors
Diane Brown
Executive Director, Arizona PIRG Education Fund
Diane E. Brown has worked with the State PIRGs for over 35 years, over half serving as the Executive Director of Arizona PIRG. She is a leader in efforts to protect consumers from unfair marketplace abuses and unsafe products; promote 21st century energy and transportation options; and foster an accessible and accountable government. Diane frequently works with diverse entities; advocates and testifies before elected and governmental officials; and appears on television and radio and in newspapers across the state. Diane’s leadership has helped to secure public interest victories at the Arizona Legislature, the Arizona Corporation Commission, and various state agencies. Diane is a recipient of awards from the Arizona Capitol Times, Phoenix Business Journal, League of Women Voters of Arizona, and Arizona League of Conservation Voters.
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