As we wrap up 2024, how confident do you feel in your energy storage development and procurement strategies? With changes in domestic content requirements and looming tariff additions on the horizon, development and procurement decisions can look more challenging than ever. In this uncertain environment, having access to the product data and resources you need for project planning is essential. Here’s a closer look at what we know is coming in 2025 and how Anza can help you pivot as needed depending on how market uncertainties shake out.
Known changes ahead – Domestic content & Section 301 BESS tariffs
As we noted in part one of our Domestic Content 101 series, some changes regarding domestic content are already known for 2025. Currently, solar + storage projects can be viewed as a single energy project for domestic content qualification. This allows the entire solar + storage project to qualify for the 10% bonus credit from either the solar or storage portion of the project, depending on the product mix used.
In 2025, technology-neutral clean energy incentives will go into effect, with each technology needing to qualify separately for tax credits. Once this change occurs, solar + storage projects cannot be viewed as a single energy project for domestic content eligibility, meaning both the solar and storage facilities will need separate strategies for meeting the domestic content requirement. These strategies may continue to allow for blending domestic and international supply, but determining the optimal approach will require continuous insight into pricing, availability, and tariff risk around domestic and international product options.
In addition to this change, the percentage of domestic content required for the bonus credit will increase from 40% (2024 commencement of construction year) to 45% (2025 commencement of construction). An overview of the Elective Safe Harbor calculations used for BESS projects to qualify for the domestic content bonus credit is below:
BESS portion of Table 1—New Elective Safe Harbor provided in the Domestic Content Safe Harbor Notice from the IRS.
While both storage and solar domestic content manufacturing continue to ramp up in 2025 and beyond, the energy storage market will still need to rely on imported products to meet demand in the near term. Earlier this year, the Biden administration announced a Section 301 tariff increase on Chinese imports, set to raise BESS tariffs on lithium-ion non-EV batteries from 7.5% to 25% in 2026. This announcement gives the market approximately a 1.5-year advance notice of changes, allowing energy storage procurement strategies to adapt accordingly. Many with near-term BESS buying needs have already accelerated plans to get ahead of the known change in 2026. However, new market uncertainties have some developers and sourcing teams rethinking their plans.
In the wake of the 2024 presidential election, buyers are trying to predict what other changes may come with Trump’s second term in office. Right now, the main concern focuses on new tariffs that could be implemented shortly after the change in administration. For the storage market, experts are most closely watching for a rapid increase to Section 301 tariffs (to rates upwards of 60%) on a faster timeline than the increase to a 25% BESS tariff rate in 2026 previously announced. The industry is also waiting to see if revisions are made to the existing domestic content requirements when final regulations are released. As changes occur, we expect that project plans may need to evolve, so developers with thoughtful contingency plans will be the best positioned for success.
Domestic content & tariff insights at your fingertips with Anza
While no one can see into the future, Anza can help equip you with the domestic content and trade risk data and insights you need to make optimal decisions for your solar and storage projects based on what we know today and can anticipate as likely to happen in the future. The Anza platform provides real-time market intelligence directly from suppliers, so you can save valuable time and see the current state of the market as policies evolve in 2025.
With limited domestic content currently available for battery energy storage systems, staying up-to-date on what will be available and when it will be available for delivery is crucial if securing domestic content is part of your plans. The Anza platform currently offers six battery options manufactured domestically – with a growing number of suppliers offering non-Chinese and non-domestic options as well – giving you insights into pricing, availability, and manufacturer information.
Anza’s one-of-a-kind technology can also help you compare energy storage product options across the market by total lifecycle cost and find the ideal component specs and configurations. As prices shift, you can compare AC- and DC-integrated energy storage system options, including installation costs, maintenance, augmentation, and warranties, to minimize lifetime project costs.
Getting access to accurate information quickly in a rapidly changing market will be crucial to making the best financial and risk mitigation choices for your projects. Let’s look at an example of an Anza customer who needed support in a short timeframe earlier this year to maximize their project profits using domestic content.
Client experience: Maximizing solar and storage project value through optimized domestic content strategies
Anza’s client, with limited resources, needed to understand if the domestic PV products originally specified for their project were optimal for their solar and storage project or if they should potentially pivot their strategy. With the shift toward 2025 rules for achieving separate domestic content thresholds or solar and storage looming, the IPP needed to rapidly confirm their approach toward securing domestic content as a combined facility under the 2024 interpretation.
Anza quickly narrowed down our database of 125+ modules and 30+ BESS options to find our client’s optimal solar + storage configuration. We analyzed 18 domestic PV and 5 domestic BESS options alongside international options for each product, to identify the combination that would optimize lifetime value and ensure compliance with domestic content bonus credit requirements.
Ultimately, Anza recommended a solution of a domestically sourced BESS with internationally sourced solar modules to minimize CapEx. Based on Anza’s guidance our client unlocked $20M from the domestic content adder while maximizing the lifetime value of their selections.
Are you ready to equip your team with the data and resources they need to manage trade risk, take advantage of domestic content, and find the best deal? See how partnering with Anza can help you navigate the complexities of energy storage development and procurement. Talk with our team today to find out more about how we can help.
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