Developers and vendors have had mixed views over the potential application of the Investment Tax Credit to energy storage equipment at renewable energy facilities. Guidance was lacking and opinions were mixed, including those of government agencies. Storage would allow PV and other intermittent renewables to increase their revenue per kW by providing firm and dispatchable power, increased sales of energy during the highest paid peak period, and the ability to offer additional ancillary services of great value to the grid operator. But, without the assurance of a tax credit, developers were cautious about figuring storage into their calculations.
However, the Treasury has now issued guidance on the ITC cash grant in lieu of a credit, and storage facilities are included. (see page 11) Storage must be "integrated" into the project, but the guidance on that is not restrictive. Now, the additional revenue from using storage can be factored into a project, and the investors can benefit from the tax credit/grant.