New York is consistently ranked as one of the top 10 solar markets in the United States. According to the Solar Energy Industries Association, nearly 4% of its electricity is solar-sourced, and its Clean Energy Standard initiative aims to get 70% of the state’s energy from renewable sources by 2030.
According to Energy Sage, the average price to install a solar panel system in New York is $16,050, but the state’s many incentive programs can lower that cost by thousands. Learn more about these incentives below and check out our picks for the best solar companies when you’re ready to start your project.
New York Solar Tax Credits and Rebates
New York’s drive to meet its clean energy goals means the state provides several solar rebates and tax credits to reduce system costs. Here are the top solar incentives available in the Empire State.
NY State Solar Energy System Equipment Tax Credit
A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. The NY State Solar Energy System Equipment Tax Credit is equal to 25% of your qualified solar energy system equipment expenditures up to $5,000. That means if you put $20,000 toward qualifying solar equipment, you can get a $5,000 (25%) tax credit.
You’re able to claim this credit if you do the following:
- Purchase solar energy system equipment
- Enter into a written agreement to lease solar energy system equipment
- Enter into a written agreement that spans at least 10 years for the purchase of power generated by solar energy system equipment not owned by you
The solar energy system equipment credit is nonrefundable. Any credit that exceeds the owed tax amount can be carried over for up to five years.
NY-Sun Megawatt Block Program
The Megawatt Block Incentive is part of the NY-Sun Initiative. It provides an up-front dollars-per-watt ($/W) rebate for both residential and commercial solar panel systems. The NY-Sun program divides the state into regions (ConEdison, Long Island, upstate) and assigns a certain amount of incentives to each region. Each region is then broken into blocks and designated an allocation of megawatts (MW) eligible for NY-Sun incentives. Incentives remain available until all blocks within a region are fully subscribed.
Incentive values range from 20 cents per watt (ConEdison region) to 50 cents per watt (upstate region).
Solar Electric Generating System Tax Abatement
The Solar Electric Generating System (SEGS) Tax Abatement provides a four-year, 5% tax abatement for constructing a solar electric generating system on residential and commercial buildings in New York City. The abatement is part of the city’s sustainability plan, PlaNYC. The maximum abatement is $62,500 per year for four years or the building’s annual tax liability, whichever is less. The NYC Department of Buildings (DOB) determines eligibility and approves the application, while the Department of Finance administers the benefit.
Solar Project State Sales Tax Exemption
New York has exempted sales-and-use tax on the retail sale and installation of commercial solar energy systems equipment since 2012. Commercial property owners don’t have to pay the 4% New York State sales-and-use tax or the 0.375% sales-and-use tax rate imposed in the Metropolitan Commuter Transportation District. Purchases are exempt from local sales-and-use taxes only if the jurisdiction enacts the exemption.
See which jurisdictions provide the exemption.
If you’ve researched going solar, you’ve likely heard of net-metering. A net-metering policy allows solar owners to sell excess solar energy back to electric companies for credits on their electric bills. Policies are designed to ensure solar owners get paid fairly for the energy they sell.
Check out the top net-metering programs in New York:
Federal Solar Tax Credit
The federal solar tax credit offers solar owners a huge financial benefit. It allows residential and commercial property owners who install solar power systems to reap a 30% tax benefit on solar and battery storage equipment. The policy was introduced as part of the Energy Policy Act of 2005 and was initially set to expire in 2007. However, Congress has extended it multiple times, giving homeowners more time to take advantage of the deduction.
The rates fluctuate, but thanks to the Inflation Reduction Act (IRA), it should remain stable for a while. The IRA offers tens of thousands of dollars in rebates and tax incentives to those who use solar energy. The climate bill was signed into law in August 2022, with $369 billion set aside for climate investments.
The tax credit percentage was meant to drop to 22% in 2023, but because of the IRA, it will remain at 30% until 2033. The credit will then drop to 26% before reducing to 22% in 2034. It will end in 2035 unless Congress renews it again.
You can also claim the 30% credit for stand-alone solar batteries with a minimum of 3 kilowatt-hours (kWh) of capacity. The battery doesn’t have to be directly tied to a solar system to qualify.
New York is determined to reduce the state’s high usage of grid-generated electricity. It encourages New York residents to go solar by offering numerous incentives to save money on solar panels, batteries, system installation, and other equipment.
If you’re interested in installing a solar system, Venture Solar and Momentum Solar are among our list of best solar companies. Both service New York and are known for their quality products and customer service.
FAQ About Solar Tax Incentives in New York
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