ITC Treatment for PV+ES

Paul,

How does SAM treat the ITC for a PV+ES system? Does the ITC apply to all the system costs regardless of the amount of energy that the ES system may be charged from PV?

Best,

Nathan

Hi Nathan,

I assume that "PV+ES" means PV with energy storage (battery). When you specify the ITC as a percentage, SAM calculates the percentage based on the total installed cost, regardless of how the battery is charged and discharged.

You can verify this by looking on the Results page Cash Flow tab at the State ITC and Federal ITC rows (under "STATE INCOME TAX" and "FEDERAL INCOME TAX", respectively). The ITC amount should be the product of the percentage you specify on the Incentives page and the total installed cost on the System Costs page (plus a fixed ITC amount if you specify it on the Incentives page).

Best regards,
Paul.

Thanks for the prompt response.

Are there future plans for SAM to accommodate for the "75% cliff" rule for how the ITC would get applied to energy storage system installed with PV?

www.irs.gov/pub/irs-wd/1308005.pdf

Hi Nathan,

Thank you for sending that link.

We do not have plans (at the moment) to implement the "75% cliff" for the ITC in SAM. We will add metrics to show how much of the energy that goes to the battery is from the PV array, which will at least make it possible to determine whether the it would apply. With that information, it would be possible to write a script to model the effect of the regulation on the ITC amount in Year 1 and any recaptured credit in subsequent years.

Best regards,
Paul.