SEIA Raises Concerns Over Exclusion Of Energy Storage in Low-Income Community Incentive Credit Changes

On October 3rd, the Solar Energy Industry Association (SEIA) shared its concerns regarding the proposed changes to the low-income community incentive credits, which are set to shift to a technology-neutral tax credit structure by 2025. A key issue raised by SEIA is the exclusion of energy storage assets from eligibility under the new rules, a move that could create challenges for both residential and community solar companies and limit access to energy storage for solar customers.

The low-income community incentive credit is designed to encourage investment in solar energy projects that benefit low-income households and communities, including projects located on tribal lands and within affordable housing developments. Under the current structure, companies that meet the criteria for the tax credit can increase the value of the technology-neutral investment tax credit by up to 20 percentage points.

However, with energy storage assets set to lose eligibility starting in 2025, SEIA argues that this change will introduce cumbersome administrative procedures and contractual costs, making it harder for solar companies to integrate storage solutions. This, in turn, could reduce consumer options and hamper the deployment of energy storage, which plays a critical role in enhancing grid reliability and supporting energy resilience.

Abigail Ross Hopper, President and CEO of SEIA, emphasized the importance of removing barriers to solar and energy storage applications at a time when electricity demand is rising. "The proposed changes to the incentive credit for low-income communities in 2025 will dampen enthusiasm for energy storage, missing vital opportunities to improve grid reliability and support communities affected by environmental injustice. This shift runs counter to the bill's original intent, and we strongly urge the government to reconsider before finalizing these rules."

The SEIA has previously commented on other proposed rules for technology-neutral tax credits, and this latest development introduces additional concerns. By excluding energy storage from the benefits of the low-income community credit, SEIA argues that it will make energy storage less attractive to both homeowners and businesses, particularly in the communities the program is meant to support. This change would undermine broader efforts to improve the reliability of the power grid and reduce customer vulnerability by integrating more energy storage solutions.

Since the low-income community incentive credit was implemented in 2023, the U.S. Treasury has received over 50,000 applications, representing 1.5 gigawatts of solar energy capacity intended to assist low-income households. While the Treasury has not provided specific figures for the number of applications that included energy storage, data from 2023 shows that 13% of residential solar installations were paired with energy storage. This percentage is projected to double by 2028, further underscoring the growing demand for integrated storage solutions as part of the clean energy transition.

SEIA's concerns highlight the potential missed opportunities if energy storage is not supported in low-income communities, where access to resilient, reliable, and affordable energy is critical.