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How Inflation Reduction Act Will Subsidize Residential Energy Storage Systems, Including Vanadium Batteries

By John Davis

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The Inflation Reduction Act (IRA), signed into law by President Joe Biden on August 16th of this year, includes clean energy and climate-related incentives worth approximately $370 billion. This could supercharge climate change mitigation and, in particular, increase interest in​ industrial, commercial, and residential energy storage systems such as vanadium batteries.

Tax Credits for Residential Solar & Storage Systems — Including Vanadium Batteries

The IRA’s $370 billion incentives are tax credits for purchasing and using clean energy technology for both industrial applications as well as residential installations.

For instance, under the IRA, homeowners will receive a 30% tax credit for installing residential solar panels, solar plus energy storage systems, or standalone energy storage systems before December 31, 2034.

Those who have already scheduled or installed a solar panel project will also receive the 30% tax credit, which is an increase from the previous credit amount of 26%.

There are qualifications for energy storage systems used in residential applications. To qualify, homeowners need to install an energy storage battery system with 3 kilowatt-hours or more capacity.

​This is​ where vanadium flow batteries are on the leading edge. Vanadium flow batteries meet all of the requirements for a homeowner to take advantage of this new tax credit, even if you decide to install just a battery without solar or renewable generation sources. In the past, the batteries had to directly connect to solar PV arrays or other renewable generators for at least 70% of the year.

Vanadium flow battery technology is a game-changer regarding residential system cost and storage capacity. VFB systems will be more powerful and offer up to 30 kilowatt-hours of energy storage. This is over twice the discharge time of lithium-based systems. Plus, lithium demand is threatening to delay or reduce stationary energy storage system production. Vanadium batteries will easily fill the gap and help meet this demand.

The good news is the IRA reserves $500 million for the Department of Defense, a portion of which will go towards exploring and mining potential alternative metals to help reduce lithium demand.

An alternative is needed, and that is where vanadium comes into play.

What is Vanadium?

Vanadium is a natural element, has the chemical symbol V, and is a semi-hard, steel-blue metal. Vanadium was primarily used in the past to produce durable car parts such as crankshafts, gears, axles, piston rods, springs, and more.

Before its use in automobiles, vanadium played a vital role in making armor plates and swords. But eventually, another use for vanadium became clear — it can store large amounts of electricity.

This storage capability makes it a great way to save energy and feed it into power grids or residential homes when needed.

Vanadium redox flow, or V-Flow, batteries are now transforming the way energy is stored — making energy storage easier, less expensive, and much more efficient, including in residential systems.

Why Vanadium Flow Batteries are Ideal for Residential Systems

Vanadium batteries can store large amounts of electricity indefinitely.

One of the big problems with lithium batteries is that they degrade rapidly. Estimates indicate that lithium batteries last for just 300 to 400 charge/discharge cycles before replacement is needed.

In comparison, vanadium redox flow batteries can last for 35,000+ charge/discharge cycles, and that limit exists only because other parts of the battery wear out, not the vanadium.

Vanadium can be reused indefinitely to store power.

Vanadium Redox Flow Battery Benefits Compared to Lithium 

Vanadium flow batteries have greater energy storage capability as well. That’s because vanadium batteries store energy in tanks while lithium batteries store energy in cells. As a result, tank expansion is all that is needed to increase energy storage in vanadium batteries. In comparison, users must buy more lithium batteries to increase energy storage.

This leads to another advantage — vanadium flow batteries are less expensive than lithium batteries.

According to Renewable Energy World, a lithium-ion-based storage system has an average cost of $1,750 a kilowatt-hour. And remember that cost increases if the system needs enlargement. On the other hand, Renewable Energy World says a vanadium system costs $500 a kilowatt-hour or less. This takes into account that VFBs last three times longer than lithium systems and do not require battery replacement as required by lithium systems. 

More advantages of vanadium batteries include:

  • Long lifespan of 25 years or more
  • Low maintenance
  • Sustainable and reusable
  • Non-flammable and non-explosive
  • Can operate in low temperatures.

Another great thing about vanadium batteries is they can collect energy from the traditional electric grid.

This energy storage technology allows homeowners access to backup power during outages, even without solar panels.

Users could reduce their electric bills by collecting power at times of the day when rates are lower and then use it during peak consumption periods when rates are higher.

StorEn’s CEO, John Davis, at the new Greenville facility; image courtesy StorEn Technologies.

To learn more about vanadium flow battery technology and leading vanadium flow battery company StorEn Technologies, you can subscribe to our newsletter here and follow the company on Facebook, Twitter, LinkedIn, and Instagram.

You can invest in the company here.


This article is supported by StorEn Technologies.

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