Energy-Storage.news Premium speaks with Ravi Manghani at Anza Renewables about why some BESS developers are forgoing the ITC altogether.
Why it matters: Subsidies often come with strings that delay projects; sometimes it's more profitable to pay full price for hardware and start earning merchant revenue immediately.
The Hidden Cost of Compliance
In the US, the 30% Investment Tax Credit (ITC) under the Inflation Reduction Act looks like a gift, but for many, it’s actually a regulatory straitjacket. To unlock the full credit, developers must navigate a labyrinth of prevailing wage requirements and domestic content bonuses. If you can't prove your battery racks weren't just 'assembled' but actually 'manufactured' with US steel or cells, that 30% credit often shrivels to 6%. For a European developer, this is a masterclass in why you shouldn't build your business model around the next EU 'Net-Zero Industry Act' (NZIA) rebate without calculating the bureaucratic friction.
Speed as a Competitive Moat
The developers walking away from the ITC are trading a tax break for project velocity. In a merchant market where arbitrage and frequency response (FCR/aFRR) revenues are volatile, getting a 50MW/100MWh system online six months early often yields a higher NPV than waiting for 'compliant' hardware. We see this in the Netherlands and Germany: installers often wait months for subsidized components when a non-subsidized, high-performance LFP solution from a brand like Sungrow or CATL is available in weeks.
The Arithmetic of Autonomy
Stop chasing the subsidy dragon. Build for the Levelized Cost of Storage (LCOS). If your C&I proposal in Spain or Italy doesn't pencil out without a government handout, your engineering is likely the problem, not your financing.