For some storage developers, the ITC might not be worth it after all

Large battery storage developers are rethinking whether a federal tax credit is still worth chasing, and the answer says something about where battery prices are headed. Companies building big energy storage projects can buy battery units from China for as little as $70 to $80 per kilowatt-hour (roughly $120 after tariffs and shipping), from other countries for $130 to $140, or from U.S. manufacturers for $160 to $180. The pricier American units can qualify for a 30% investment tax credit, a federal incentive for storage projects that meet certain rules, including paying workers prevailing local wages.

New restrictions tied to a 2025 law now disqualify projects if too much of their equipment is linked to China, adding cost and paperwork for developers trying to prove compliance. Combined with falling Chinese battery prices, some developers say the math no longer favors paying extra for U.S.-made batteries just to claim the credit. One industry source estimates roughly one in five storage projects now plans to skip the credit entirely. U.S. battery factories from companies like Samsung SDI and LG Energy also won't be running at full capacity until late 2026 or 2027, so developers needing batteries sooner may buy from China regardless.

None of this changes what's available to homeowners today, but it points to battery and storage costs that may keep shifting as trade rules and domestic manufacturing evolve. Federal guidance on the new restrictions is still incomplete, so more changes are likely as regulators clarify the rules.