The One, Big, Beautiful Bill Act brought changes, some clarity to US energy storage development

AI generated summary

The 'One Big Beautiful Bill' (OBBB) Act has introduced significant changes to the US energy storage landscape, providing clarity and maintaining investment tax credits (ITCs) for battery technologies through 2033. This contrasts with earlier proposals that threatened to eliminate these credits and impose strict construction timelines. The final version of the bill emphasizes energy security and domestic manufacturing, aligning with the Trump administration's priorities, while also offering technology-neutral tax credits that can cover a substantial portion of project costs.

However, the Act also introduces stringent Foreign Entity of Concern (FEOC) restrictions that could complicate supply chains for energy storage developers. Tax credits will be denied for projects heavily reliant on Chinese equipment or investments, with increasing thresholds for non-prohibited foreign entity costs set to take effect after 2025. While these regulations aim to encourage domestic sourcing, they present new challenges for developers navigating compliance and potential penalties. Despite these hurdles, industry leaders view the clarity provided by the OBBB Act as a positive development for future energy storage projects.