Quick navigation: Solar Incentives in New York
New Yorkers have access to some of the best solar programs and incentives in the country.
When combined, these solar incentives could cover nearly 80% of the total cost of going solar. However, it’s important to know how these incentives work and who is eligible to benefit from them.
This simple guide was created to help New Yorkers learn which incentives are available to them, and how you can take advantage of these programs before they expire.
We’ll begin by discussing statewide incentives available to most residents and then finish off with more location-specific incentives.
This guide will demonstrate how homeowners can dramatically reduce their electricity bills and save tens of thousands of dollars with this one simple home upgrade.
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) was created to encourage the adoption of renewable energy across the United States. This incentive allows New Yorkers to claim 30% of the total cost of their solar panels as a credit on their Federal Income Taxes.
IMPORTANT: Unlike a deduction, which only lowers your taxable income, a tax credit directly reduces the amount you owe, essentially acting like a dollar-for-dollar refund on your tax bill.
Here’s an example:
If your solar installation costs $25,000, the Federal ITC allows you to deduct $7,500 directly from your Federal Tax Liability. This means if you owe $7,500 and more in income taxes, you will receive a $7,500 increase on your tax return.
New York State Solar Tax Credit
In addition to the Federal ITC, New York State offers a significant tax credit through the Solar Energy System Equipment Credit. This credit gives New Yorkers up to $5,000 back on their State Income Tax Returns.
Just like the Federal ITC, this state credit directly reduces your tax bill.
Here’s how it works:
Using the same $25,000 solar installation example, you would receive a $7,500 Federal Credit PLUS the $5,000 State Tax Credit. Reducing the system cost by 50 percent!
Key points to keep in mind:
- The tax credit applies to both purchased and financed solar systems.
- If your tax liability is lower than the credit amount, you can carry forward the unused credit to future years. Avoiding leases can save you up to $40,000 compared to leasing and $80,000 compared to staying on the grid.
NYSERDA Rebates
The New York State Energy Research and Development Authority (NYSERDA) is a government agency that oversees New York’s renewable energy programs. One of NYSERDA’s most important programs is the NY-Sun Initiative, which provides rebates to offset the upfront costs associated with solar installations like permitting and engineering.
How It Works:
NYSERDA uses what’s called a “Megawatt Block” rebate structure. This means that as more people adopt solar in a certain area, the rebate amounts gradually decrease until they are phased out entirely. NYSERDA divides the state into three distinct regions:
- Con Edison Region (includes New York City and Westchester County)
- Upstate Region
- Long Island Region
DISCLAIMER: This rebate is only available for projects installed by a NYSERDA-certified solar panel installer. The easiest way to determine your eligibility and rebate amount is to consult a NYSERDA certified installer.
New York State Property Tax Exemption
One of the most common concerns among homeowners when making a home improvement is the potential increase in property taxes. Thankfully, New York State has put in place a Property Tax Exemption for Solar Energy Systems.
This exemption ensures that the added value of a solar panel system is completely exempt from property taxes for 15 years. So while your solar panels will increase the value of your home, you won’t see any increase in property taxes during that time.
This exemption applies to most New York cities and townships, though a small number of municipalities have opted out of this program.
To learn more about New York State’s Property Tax Exemption for Solar Project, book a FREE Solar Discovery Call today.
New York City’s Solar Property Tax Abatement
Homeowners in New York City can take advantage of a unique incentive that reduces their property taxes for four years.
This Solar Property Tax Abatement covers additional 30% of the solar installation costs for New York City homeowners. This incentive, combined with all of the other incentives available to New Yorkers, would drop a $25,000 installation down to only $5,000.
Here’s how it works for a $25,000 solar system:
$25,000 GROSS SYSTEM COST
-$7,500 (PROPERTY TAX ABATEMENT)
-$7,500 (FEDERAL ITC)
-$5,000 (STATE TEX CREDIT)
_______
$5,000 – NET SYSTEM COST Empire Solar, you can trust that your project is being handled by one of the top companies in New York State.
Net Metering
Net Metering is by far the most important benefit of installing solar panels on your home. This program allows you to earn credits on your electric bill for any excess energy your solar panels produce.
Here’s how it works:
During sunnier months, typically from the Spring all the way through the Fall, your solar panels often generate more electricity than your home needs. This will build credits with your electric company to be used in the winter months when the sun isn’t producing enough energy to power your home.
To summarize:
- Throughout the year, your solar panels often produce more electricity than your home needs.
- The excess energy is sent back to the grid, and your power company credits you for that energy.
- At night and during the winter, you can use those credits to offset your electricity usage.
This system ensures that New York homeowners enjoy the benefits of solar energy year-round, making it faster to return on investment compared to states without Net Metering programs in place.
Conclusion: How To Make the Most of New York’s Solar Program
New York State offers a comprehensive array of incentives and rebates to o make solar energy more accessible and affordable for homeowners. Incentives like the NYSERDA Rebate provide homeowners upfront savings, while State and Federal Tax Credits help cover nearly 50% of the total project cost.
For homeowners in New York City, the Solar Property Tax Abatement significantly reduces property taxes, while statewide programs like Net Metering and the Property Tax Exemption deliver long-term savings.
Combining these programs and incentives, whenever possible, will greatly reduce the cost of installing solar panels and allow homeowners to cut their electricity costs as much as 80%. However, since some of these incentives depend on regional factors and specific requirements to qualify, it’s important to consult with a state-certified solar installer.
If you’re researching solar for your home, reach out to a trusted local installer to understand how these programs apply to you and your home and which incentives are available in your specific zip code. With electricity rates continuing to rise and these generous incentives available in New York, there has never been a better time to upgrade your home with solar panels.
DISCLAIMER: Tax credits are only available to homeowners with sufficient federal tax liability. Unused credits may carry forward to future tax years, where applicable. Consult a tax professional to confirm eligibility and maximize your benefits.
