The Federal Investment Tax Credit (ITC) available for solar installations can also cover the cost of battery storage. This is not a refund or a rebate. The ITC provides a non-refundable credit you can count towards your federal tax burden. The credit is worth a percentage off the total installation cost of your battery system. For systems installed by the end of 2021 the tax credit is 26%. The credit is also 26% in 2022, then 22% in 2023, and goes away after that. Learn more about the federal solar investment tax credit. You file for the tax credit when you file your taxes for the year the battery was installed.
There are strict specifications for eligibility. This is based on how much the battery system is charged by solar. According to the IRS, a battery system on your home must be 100% charged by solar energy to receive the credit. This means the solar panels connected to the battery system must be the source of its power to qualify for the full federal tax credit. The rules are different for commercial battery systems. These systems can receive a portion of the federal tax credit if at least of 75% their charge comes from solar. See our Battery Storage Guide for more information.
Some states and jurisdictions are also beginning to offer incentives. Maryland, for example, offers a 30% state tax credit off of the cost of battery storage with a maximum credit of $5,000 for residential systems.