With the passage of the Inflation Reduction Act (IRA) earlier this month, the United States made the most sizable investment in achieving its climate goals to date. Regardless of the political context or motivations, one thing is clear: the biggest beneficiary of the act could be businesses that rely on portable power solutions.
Before the IRA, business owners could only take advantage of a narrow tax credit applied to energy storage when connected to a solar-capture system. Moving forward, energy storage (regardless of charging method) now qualifies for a substantial incentive.
The IRA now provides a 30% tax credit for business-owned battery systems above 5 kWh. For reference, the vast majority of Joule Case food truck customers purchase 12-18 kWh of energy storage. This incentive took effect retroactively on January 1, 2022. This means that any system that has been purchased and deployed this year benefits. Business owners can claim this credit on installed battery systems through 2033. The credit begins to sunset in 2034, dropping to 22.5%, and then to 15% in 2035 and down to 0% in 2036.
Many Joule Case customers have already been able to take advantage of tax credits because they were able to link their battery storage to solar. Clearly, not all locations and applications have that luxury (e.g. food carts with no space to install solar panels), resulting in frustration that efforts to reduce carbon emissions weren't similarly rewarded. Now, there is no difference.
When compared to other portable power options like generators, a battery system is a substantially cheaper alternative in the long term. This new tax credit makes the return on investment even better and reduces the upfront sticker shock of the side-by-side comparison to generators.
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Disclaimer: We are experts at advanced power systems—not law and taxation. We highly recommend consulting your attorney and accountant to understand how to fully take advantage of the tax incentives that might be available. This article does not constitute professional tax advice or other professional financial guidance and should not be used as the only source of information when making purchasing, investment, or tax decisions.