MN SF3473

Creates a 30 percent tax credit for taxpayers who purchase and install energy storage systems on residential, agricultural, or commercial property in Minnesota, with maximum credits of $5,000 per residential system and $25,000 per agricultural or commercial system.

Establishes an annual $5,000,000 statewide credit cap and $500,000 per-taxpayer limit, with credits allocated on a first-come, first-served basis by the Commissioner of Commerce, requiring taxpayer application before purchase and installation.

Requires energy storage systems to be directly connected to the electrical grid, capable of storing and converting electrical energy through mechanical, chemical, or thermal processes, compliant with National Electric Code and Underwriters Laboratory standards, and able to sustain rated power output for a minimum of one hour.

Excludes hydroelectric pumped storage systems and credits cannot be claimed for systems that have received other Minnesota tax credits; pass-through entities must allocate credits proportionally to partners, members, shareholders, or owners based on asset shares.

Requires annual reporting by the Commissioner of Commerce starting in 2018 on credit issuance numbers, taxpayers claiming multiple credits, and recommendations for credit modifications; provision sunsets for taxable years beginning after December 31, 2021, with reporting continuing through 2022.