How to Maximize Savings with Home Battery Incentives
How to Maximize Savings with Home Battery Incentives
1. Introduction
When it's time to install a home battery system, you're likely feeling excited and anxious, especially considering the financial investment. Luckily, there are several incentives available to you to substantially reduce the cost and enhance long-term savings. In fact, you could even get a return on investment in under a year, even if you live in a region with unpredictable weather.
Let's explore the best battery incentives for you and your family.
2. Understanding Incentives
Home battery installation incentives can range from federal tax credits to state rebates and other programs. They're designed to help you adopt renewable energy technology, which over time will help the country become more energy efficient.
2.1 Federal Solar Investment Tax Credit (ITC)
2.1.1What is the ITC?
One of the best ways to save with home battery installations is the ITC. When it's time to file federal taxes, you can deduct 30% of the solar energy system installation cost. That includes solar panels and related equipment.
For example, if your solar panel system installation costs $10,000, that's $3,000 you don't owe to the IRS.
2.1.2 How Much Can You Deduct with the ITC?
This deduction was set to expire in 2022, but the good news is that it's now extended until 2034 with some limitations. The amount you can claim depends on the year of installation:
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Until 2032 - 30% Tax Credit
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2033 - 26% Tax Credit
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2034 - 22% Tax Credit
2.1.3 What Deductions are Covered with the ITC?
You can get a tax credit for the following expenses:
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Solar panels.
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Labor for installation, including permit fees, inspection, and developer costs.
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Additional solar equipment, such as inverters, wires, and mounting hardware.
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Energy storage systems rated at least 3kWh.
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Sales tax on eligible expenses.
2.2 Additional Incentives
It's not just the federal government helping. You can explore other incentives such as rebates or state programs to further reduce the cost of home battery systems.
2.2.1 Rebates
Depending on where you live, your state or utility offers upfront rebates for installing a grid-connected battery. For example, if you live in California, the Self-Generation Incentive Program (SGIP) will provide rebates based on your battery's capacity, measured in dollars per kilowatt hour.
Rebates can vary depending on factors like your income and if you live in a high-fire threat district. But if you meet all the qualifications, you could get the entire cost of your battery covered.
2.2.2 Bring Your Own Battery Programs
When you use a Bring Your Own Battery program, you use your battery's stored energy during peak electricity demand, providing you extra income and alleviating stress on the grid.
If you live in Massachusetts, you can apply for the ConnectedSolutions program. During certain times of the year, you could receive $275 for each kilowatt, and the average homeowner receives around $1,500 per year with a standard home battery. At that rate, you could pay for your home battery incentive in less than a decade.
Do note that Bring Your Own Battery programs may have restrictions on the battery inverter equipment you can use. Make sure to review the list of approved brands before installation.
2.2.3 Virtual Power Plants
You may also want to consider setting up a virtual power plant. That's when your home has a solar-plus-storage system and functions like a mini power plant.
Virtual power plants can be financially rewarding because you sell your electricity to the grid during high-demand periods. Utilities may offer you a lump-sum payment or pay you on a dollar per kilowatt hour basis.
3. What Home Battery System Should I Install?
Now that you know the financial benefits of home battery incentives, you might be wondering where to start searching.
We recommend Anker SOLIX X1 Home Enegy Storage System because it will help you capitalize on all of these incentives, instantly.
X1 delivers comprehensive solar-plus-storage with high energy capacity and massive power output. It's capable of running your entire home on stored solar energy or as backup power during outages. The power system is also built with a sleek and refined design, so it's an aesthetically pleasing choice for your home, too.
Join our discussion here or in our SOLIX HES X1 Facebook Group and let us know which energy solution works best for your home or which one you're most interested in.
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