PJM's capacity auction has now cleared at the price cap two years running, and this year the region still came in about 6,600 MW short of its own reliability target. Data center demand is the main culprit. Capacity costs are up 262% year over year. Batteries can play a key role in meeting the shortfall, and there's even more value to be had with the ITC adders.
The base ITC for storage is 30%, but a lot of sites qualify for adders that push it to 40% or 50%, and not everyone is aware. Not because the economics are bad. Because nobody asked the question.
This post walks through how the adders work, then gets into our own numbers, nationally and in PJM, on how many sites clear 40% and 50%, how much storage that represents, and how much of it we're already working.
Storage gets a 30% base ITC as long as the project meets prevailing wage and apprenticeship rules, which most C&I projects do without much trouble. On top of that, three adders are available:
Domestic content, +10 points. Since 2025, solar and storage in the same project get evaluated separately for domestic content. The domestic content threshold itself keeps rising (40% pre-2025, 45% in 2025, 50% in 2026), and it's the most paperwork-heavy adder to prove out. But BESS-specific safe harbor guidance has made it a lot more tractable than it was two years ago. Based on feedback from the market, a lot of vendors already have domestic content qualified solutions, or will have them in the next year.
Energy community, +10 points. This one's a geography check, not an engineering one. If the site sits in a qualifying census tract, including brownfields, areas with fossil-fuel employment history, coal plant or mine closure communities, it qualifies. No procurement documentation needed, just a lookup against the published IRS/Treasury lists.
Low-income community, +10 to 20 points. For projects serving low-income housing or providing economic benefit to low-income communities. Capacity-limited and competitive, unlike the other two.
Two adders and you're at 50%. All three, in the right location, and you're past 60%. The important part for how we think about a pipeline: these stack independently.
A site that misses domestic content can still hit 40% on energy community siting alone. That's why we bucket sites by 40%+ and 50%+ instead of assuming everything sits at the 30% base, the flat assumption just isn't how the incentive works, and it undersells a lot of real estate.
Station A maintains a national map of commercial and industrial properties, resolved down to the parcel. For each property we carry the parcel boundary, building footprints, usable open land, utility territory, load zone, and the census tract designations that determine tax credit eligibility. That's what lets us answer the adder question from nothing but an address.
For this analysis, we looked at 118,650 commercial and industrial sites across the country. We observed 58% clear 40% ITC and 11% clear 50% ITC.
|
Metric |
Value |
|---|---|
|
Total assessed sites |
118,650 |
|
Sites at ≥40% ITC |
68,440 |
|
Sites at ≥50% ITC |
13,238 |
|
BESS potential at ≥40% sites |
193 GW / 772 GWh |
|
BESS potential at ≥50% sites |
37 GW / 148 GWh |
|
Metric |
Value |
|---|---|
|
PJM sites assessed |
52,678 |
|
PJM sites at ≥40% ITC |
28,673 |
|
PJM sites at ≥50% ITC |
3,415 |
|
PJM BESS potential at ≥40% sites |
67 GW / 268 GWh |
|
PJM BESS potential at ≥50% sites |
9 GW / 36 GWh |
It's worth being precise about what PJM is and isn't here. The 40% qualification rate inside PJM tracks the national rate closely, and the 50% rate is actually lower, 6% against 11% nationally. PJM's advantage is that 67 GW of adder-eligible storage potential sits in the market paying the highest capacity prices in the country. The tax credit and the capacity revenue land on the same sites.
Since we started this business, our goal has been to make it easy and effortless for our customers to understand the energy opportunity at any given site. Knowing which ITC adders are applicable to any given site only requires an address. We're working to connect the dots between where these adders exist and the critical need for capacity on the grid.
Site counts and gigawatts tell you the size of the opportunity. They don't tell you where to look. Putting the data on a map tells a richer story.
Adder eligibility for the purpose of this analysis is a geographic lookup, not an engineering judgment. We check each site against the published Treasury and IRS designations for energy communities and low-income communities. Domestic content is a procurement question rather than a location one, so it sits outside these maps.
Capacity is modeled per site. We size a storage system against the property's open land, existing load, and published interconnection hosting capacity where a utility makes it available, then roll the results up to the county. Our map grows every day.
County Share of ITC Adder-Eligible GWs of BESS, national: The above map shows where the adder-eligible storage sits. Each county is shaded by its share of all the adder-eligible capacity we've mapped nationally, so the bright counties are the ones carrying real megawatts. Southern California, coastal Texas, and the Chicago and Ohio corridors do most of the work.
Share of Sites at 50% ITC, PJM: Eligibility rate rather than volume. This is the share of the sites we've mapped in each county that clear 50%. The band running through eastern Kentucky, West Virginia, and southern Ohio is the energy community adder doing what it was designed to do, lighting up former coal and fossil-fuel employment areas.
ITC Adder-Eligible GWs of BESS, PJM: The same picture inside PJM, in absolute terms. Northern Ohio, the Harrisburg to Allentown corridor, and the counties around Chicago and Washington concentrate the eligible capacity. These are the places where a battery earns a bigger credit and sits in a market paying record prices for capacity.
For a lot of C&I portfolios, the capacity opportunity plus the adders make distributed storage a no brainer. And for a lot of owners and developers we talk to, the adders are treated as gravy rather than a core part of targeting and qualifying sites upfront. That's a gap.
If you're interested in understanding which sites in your portfolio qualify for an ITC adder, what the potential capacity benefit is in PJM specifically, and what the project economics are, reach out!