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New York is recognized as one of the leading states for solar energy adoption, largely due to its comprehensive and attractive incentive programs. These incentives are designed to offset the initial costs of solar installations and enhance the long-term financial benefits for homeowners and businesses. Despite the state’s relatively cloudy weather, New York’s commitment to renewable energy has driven significant investments in solar technology, making it an ideal location for solar panel installation.
The Residential Clean Energy Credit
The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.
To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.
How to Make the Most of the Solar Tax Credit in 2024
Solar Energy System Equipment Credit
The credit amounts to 25% of qualified solar energy system equipment expenditures, with a maximum limit of $5,000.
While the solar energy system equipment credit is not refundable, any amount that exceeds the tax due can be carried forward for up to five years.
Megawatt Block Incentive
Through the NY-Sun Initiative, the Megawatt Block Incentive is available to homeowners in specific regions of New York State. The savings are calculated based on the watts installed.
Current Incentive Rates:
- Con Edison Region (New York City): Residential customers are eligible for a rebate of $0.20 per watt installed. For a typical 7 kW system, this amounts to a $1,400 rebate.
- Upstate Region: Residential customers can receive a rebate of $0.30 per watt installed, equating to $2,100 for a 7 kW system.
- Long Island Region: The Megawatt Block Incentive for residential installations has been fully allocated and is no longer available.
The Megawatt Block Incentive operates on a declining block model, where each region is assigned a specific capacity (measured in megawatts) with a set incentive rate. As more solar capacity is installed and blocks are filled, subsequent blocks offer reduced incentive rates until the program phases out in that region.
Additional Considerations:
The availability of incentives is subject to change as blocks fill up. Prospective solar customers should consult with NY-Sun participating contractors or visit the NYSERDA website for the most current information on incentive availability and rates.
By leveraging the Megawatt Block Incentive, New York residents and businesses can significantly reduce the initial costs of solar installations, contributing to the state’s renewable energy goals.
NY-Sun Initiative
The NY-Sun Initiative is a comprehensive solar energy program by the New York State Energy Research and Development Authority (NYSERDA) designed to make solar energy more accessible and affordable for residents, businesses, and communities across New York State. Launched in 2014, NY-Sun is part of the state’s broader efforts to achieve clean energy goals, reduce greenhouse gas emissions, and transition to a more sustainable energy grid.
Key Features of the NY-Sun Initiative
Megawatt Block Incentive Structure
- NY-Sun provides upfront financial incentives for solar installations through the Megawatt Block program. This program allocates specific incentives for solar capacity in blocks, or “megawatt blocks,” within three main regions: Con Edison (New York City), Upstate New York, and Long Island.
- As blocks fill up in each region, incentive rates decrease in a step-down approach, encouraging early adoption.
Community Solar Projects
NY-Sun promotes community solar, allowing residents who cannot install solar on their own properties (like renters or those with shaded roofs) to participate in shared solar projects. Community solar enables participants to benefit from solar energy by subscribing to a portion of the output of a local solar project.
Affordable Solar and Energy Equity
- A key component of NY-Sun is ensuring low-to-moderate income (LMI) households can benefit from solar. The Affordable Solar Program offers additional incentives and resources to help these households access solar energy with minimal upfront costs.
- NYSERDA partners with affordable housing developers, municipalities, and community organizations to expand solar access for underserved communities.
Solar for Businesses and Nonprofits
The initiative offers incentives and financing options for commercial, industrial, and nonprofit organizations to install solar power. This support aims to help organizations reduce operational costs and contribute to the state’s renewable energy goals.
Technical Assistance and Contractor Network
NY-Sun maintains a network of participating contractors who help customers navigate the installation process, including system design, permitting, and incentives. NYSERDA provides training and certification programs to ensure contractors are qualified to meet program standards.
New York Solar Map and Dashboard
The NY-Sun initiative includes a Solar Map and Dashboard, an online tool that provides up-to-date information on solar energy usage across the state. This tool allows residents and businesses to explore solar potential in their area, track installed solar capacity, and see available incentives.
Goals and Achievements
NY-Sun aims to install enough solar to power hundreds of thousands of homes, contributing to the state’s target of achieving 70% renewable electricity by 2030 and reaching a zero-emission grid by 2040. The program has significantly increased solar capacity statewide, helping reduce energy costs, create green jobs, and promote clean energy.
The NY-Sun Initiative provides both economic and environmental benefits, supporting New York’s ambitious goals for a sustainable future.
Net Metering
Net metering programs in New York vary by utility company—such as Con Edison, National Grid, or PSE&G—but the core concept remains the same. With net metering, solar users connected to the grid can “bank” excess solar energy with the utility company. When the solar panels aren’t producing enough to meet the home’s energy needs, as often happens during winter months, homeowners can draw from this energy bank, resulting in lower utility bills.
In New York, net metering is available for residential systems under 25 kW. While there are monthly Consumer Benefit Contribution (CBC) charges set by the utility company, these rates are generally minimal.
Solar for All
- The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development.
- The New York State Energy Research and Development Authority (NYSERDA) will utilize EPA’s Solar for All (SFA) support to bolster the state’s robust portfolio of successful solar deployment, technical assistance, and workforce development programs. This effort aims to benefit millions of residents in disadvantaged communities and low-income households. Additionally, NYSERDA plans to introduce new programs to address specific barriers to solar adoption for these populations, collaborating with New York City and affordable housing agencies across the state.
- Based in Ohio, the Industrial Heartland Solar Coalition brings together 31 communities across eight states, spanning from the Midwest to the rustbelt. Led by Growth Opportunity Partners (Growth Opps), the coalition is committed to propelling a just and clean energy transition in America’s industrial heartland communities. Its Solar for All (SFA) program, centrally managed by Growth Opps, is locally guided and implemented by 18 coalition members. Through our SFA initiative, the coalition aims to deliver energy savings to households, reduce greenhouse gas emissions, and provide training through solar workforce development programs.
- Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification.
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VDER Value Stack
New York is transitioning from net metering to the Value of Distributed Energy Resources (VDER) Value Stack model. While this new system is more complex than net metering, it offers an alternative way to earn credits based on the Value Stack Tariff. Unlike net metering, which only considers the amount of electricity exchanged, VDER Value Stack accounts for various factors including energy value, environmental value, and demand reduction value, among others. It’s important to note that once you switch from net metering to the VDER Value Stack, the change is irreversible.
Sales Tax Exemption
The Sales Tax Exemption in New York is a state incentive aimed at encouraging investment in solar energy. This exemption eliminates sales tax on the purchase of solar equipment, significantly lowering the overall cost of installing a solar energy system. It applies to both residential and commercial solar projects, making solar power more affordable and promoting the use of renewable energy sources.
Property Tax Exemption
In New York State, installing a solar energy system can increase your property’s value. To prevent this added value from raising your property taxes, New York offers a 15-year real property tax exemption under Real Property Tax Law (RPTL) Section 487. This exemption applies to the value added by eligible solar, wind, and certain other energy systems, ensuring that your property taxes do not increase due to the installation of these systems.
For systems installed between January 1, 2024, and December 31, 2034: receive 7.5% of the system expenditures each year for four years.
New York City – Property Tax Abatement for Photovoltaic (PV) and Energy Storage Equipment
The Solar Electric Generating Systems Tax Abatement offers a four-year tax reduction for installing solar electric systems on residential and commercial buildings in New York City. This program aligns with the city’s long-term sustainability plan, PlaNYC, encouraging property owners to adopt cleaner, more reliable energy sources while lowering greenhouse gas emissions.
For abatement purposes, a solar electric generating system refers specifically to systems that generate electricity from solar energy. It excludes any equipment that is part of a non-solar electric system or any recreational equipment used as storage.
The tax abatement provides 5% of eligible solar installation expenditures annually over four years. The maximum abatement is $62,500 per year for four years or the building’s annual tax liability, whichever amount is lower.
Solar, Wind & Biomass Energy Systems Exemption
The Solar, Wind & Biomass Energy Systems Exemption in New York is a property tax incentive designed to encourage the installation of renewable energy systems. Under this program, property owners who install qualified solar, wind, or biomass energy systems can benefit from a 15-year exemption from property taxes on the increase in property value that results from the installation of these systems. This means that the value added to the property by the installation of a renewable energy system will not be subject to property taxes for a period of 15 years.
The exemption is applicable to a variety of renewable energy systems, including:
- Solar electric (photovoltaic) systems
- Solar thermal systems
- Wind energy systems
- Biomass thermal systems
To qualify for the exemption, the renewable energy system must be constructed or reconstructed after January 1, 1991, and must meet specific performance and quality standards as determined by the New York State Energy Research and Development Authority (NYSERDA). The exemption applies to both residential and non-residential properties.
It’s important for property owners to consult with local tax assessors or appropriate municipal officials to ensure compliance with all application and certification requirements to receive this exemption.
Energy Conservation Improvements Property Tax Exemption
The Energy Conservation Improvements Property Tax Exemption program allows property tax exemptions for energy conservation improvements. This initiative aims to encourage property owners to invest in energy efficiency measures by reducing their property tax burden for eligible improvements.
Local Option – Real Property Tax Exemption for Green Buildings
The Local Option – Real Property Tax Exemption for Green Buildings program allows local governments to offer property tax exemptions for buildings that meet certain green building standards. This incentive aims to promote sustainable construction practices by reducing the tax burden on property owners who incorporate environmentally friendly features into their buildings.
PSEG Long Island Battery Storage Rewards
The PSEG Long Island Battery Storage Rewards program incentivizes residential and commercial customers to install battery storage systems. The goal is to enhance the efficiency and reliability of the electric grid by reducing peak demand. Participants receive financial rewards based on the capacity and performance of their battery storage systems during peak times. This initiative is part of PSEG Long Island’s broader efforts to support renewable energy and grid modernization. The program period runs from May 1st to September 30th each year.
Disclaimer
The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.
