SECTION 7. MODIFICATIONS TO

TABLE 1 FOR BATTERY ENERGY STORAGE SYSTEMS

.01 Modifications to Table 1 for Battery Energy Storage Systems (BESS) .

The First Updated Elective Safe Harbor modifies Table 1 for BESS in section 4.04(3) of Notice 2024-41 by providing the Updated Assigned Cost Percentages for BESS, which DOE sourced from its new BESS component costs for 2024.

DOE derived the Updated Assigned Cost Percentages for BESS from cost data from a variety of sources, including datasets of system characteristics, price indices, U.S. survey data from the government (for example, the U.S. Bureau of Labor Statistics, Department of Labor) and private sector, public filings from corporations, and comprehensive interviews of manufacturers, installers, developers, and owners of the representative technologies. In addition, DOE used data collected from three different national laboratories to generate the Updated Assigned Cost Percentages for BESS, rather than a single national laboratory survey that DOE relied upon for the methodology it used to generate the Assigned Cost Percentages in Table 1. The Updated Assigned Cost Percentages for BESS more closely reflect the direct cost methodology outlined in Notice 2023-38.

The First Updated Elective Safe Harbor further modifies the BESS table from Table 1 by: (i) renaming the following Applicable Project Components: (1) “Battery Pack” to “Battery Pack/Module,” (2) “Inverter” to “Inverter/Converter,” and (3) “Steel or iron rebar in foundation” to “Steel or iron reinforcing product foundation”; (ii) renaming the Manufactured Product Components “Enclosure,” within the Inverter/Converter row, to “Enclosure & Skids,” and “Climate Control,” within the Inverter/Converter row, to “Thermal Management System for Inverter”; (iii) recategorizing the following Manufactured Product Components: (1) “Thermal Management System” and “Battery Management System” are recategorized from the Applicable Project Component row of “Battery Pack,” in Table 1, to the Applicable Project Component row of “Battery Container/Housing”, and (2)

“Battery Racks” and “Metal Enclosures” are recategorized as “Enclosures” within the Applicable Project Component row of “Battery Container/Housing”; and (iv) removing the cost values for “Electrical Parts and Thermal Management System for Inverter” (within the Inverter/Converter Applicable Project Component) from the Distributed BESS column and adding them to the Printed Circuit Board Assemblies within the same column.

The modifications described above are made for purposes of the First Updated Elective Safe Harbor to better represent the variety of the Manufactured Product Components that are used for particular functions within Applicable Project Components. Additionally, “Steel or iron reinforcing product foundation” is renamed to better reflect its function, and to clarify that non-rebar steel and iron reinforcement are also covered.

With respect to the Thermal Management Systems and Battery Management Systems referenced above, the DOE has advised that most of these systems are located in the container outside of the battery pack/module. For this reason, and because DOE’s published cost analysis is based on extensive industry feedback, updating the placement of these items within the tables provided in this notice more accurately represents the Manufactured Product Components for Battery Packs/Modules and for Battery Container/Housing. Updating the placement of these items is also more consistent with the cost breakdown within DOE’s cost analysis . As such, the reclassification further improves the accuracy of the associated cost percentages provided in this notice.

.02 Updated Table for Battery Energy Storage System (BESS) .

Bulletin No. 2025–8 807 February 18, 2025

.03 Definitions . (1) Battery pack/module . Battery pack/ module means the packaged unit of battery cells that are configured electrically, in series or parallel, and is ready for installation in the battery container/housing without an additional manufacturing process.

(2) Inverter/converter . Inverter/con- verter means an end product that is suitable to convert between direct current and alternating current or direct current and direct current electricity to enable battery charge and discharge.

(3) Battery container/housing . Battery container/housing means a superstructure that houses, protects, and manages a system of multiple battery packs/modules.

(4) Battery Management System . Bat- tery Management System means a combined system of electrical and electronic parts that serves to monitor (and may also control) the condition of the battery pack/ module.

(5) Cells. Cells in a battery pack means an electrochemical cell comprised of one or more positive electrodes and one or more negative electrodes.

(6) Distributed BESS . Distributed BESS means an energy storage system for electricity generation using battery cells

and battery modules, which has a nameplate capacity not greater than 1 megawatt-hour.

(7) Electrical parts . Electrical parts mean the components consisting of only control transformers, capacitors, inductors, bus/cables, and circuit protection not on printed circuit board (PCB) assemblies.

(8) Enclosure . Enclosure means a structure that houses and protects other equipment and may provide structural support to other products and components.

(9) Grid-scale BESS . Grid-scale BESS means an energy storage system for electricity generation using battery cells and battery modules, which has a nameplate capacity greater than 1 megawatt-hour.

(10) Packaging. Packaging means the materials that surround battery cells to create a battery pack/module.

(11) Printed circuit board assemblies . Printed circuit board assemblies means finished, fully functional printed circuit boards that have all necessary subcomponents soldered and installed on to them.

(12) Thermal Management System for Inverter. Thermal management System for Inverter means the primary cooling unit to optimize operation and safety, external to and/or within the Inverter/Converter (in

which it is a Manufactured Product Component of the Inverter/Converter).

(13) Thermal Management System for Battery Container/Housing . Thermal Management System for Battery Con- tainer/Housing means the primary cooling unit to optimize operation and safety of the BESS (in which it is a Manufactured Product Component of the Battery Container/Housing).