Residents of New York are eligible for a mix of federal, state, and city incentives to support investments in installing solar energy.
- Federal Tax Credit: Residential building owners are eligible to receive a federal tax credit worth 30% of the cost of the solar installation, after subtracting the New York State Energy Research and Development Authority (NYSERDA) incentive (explained below). Assuming the NYSERDA incentive is taxable income, the total installed cost of the system is the basis for calculating the federal tax credit.
- New York State Tax Credit: Residential building owners who install solar may be eligible for a tax credit for the lesser of 25% of the installed cost of the solar energy system (up to 25 kilowatts on net-metered systems) after the NYSERDA incentive, or $5,000. It’s important to note that the federal government considers this state tax credit taxable income.
- Sales Tax Exemption: New York enacted legislation in July 2005 exempting the sale and installation of residential solar-energy systems from the state’s sales and compensating use taxes. The exemption only applies to solar-energy systems that utilize solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity.
- NY-Sun Incentive: Provides incentives for installing solar electric systems distributed through 3 regions: Con Edison, PSEG Long Island, and The Balance of the State. Under the Megawatt Block Incentive Structure, each region and sector (commercial vs residential) is assigned a series of megawatt targets at certain incentive levels, referred to as “blocks.” As applications are submitted, incentives are assigned and the kilowatts associated with the applications are added together and the units are converted to megawatts. When the megawatt target for that block is reached, the block is closed and a new block, with a new target and a lower incentive level, is started. Once all of the blocks for a particular region and sector are filled, an incentive for that region and sector will no longer be offered.In general, incentives for a typical residential or commercial system cover approximately 20-30% of the installed cost of a PV system. Note the NYSERDA incentive is paid directly to the installing contractor.
- New York City Property Tax Abatement (PTA): Available in New York City only, building owners who place a grid-connected solar energy system into service from January 1, 2014 to December 31, 2016 are eligible for a four-year Tax Abatement of 5% per year of the installed cost of the system, for a total of up to 20%.
Abatements are applied after the NY-Sun Incentive, capped at $62,500 per year or $250,000 total. This tax abatement is spread equally over four years, and may not exceed your property tax liability for any given year. If you wish to apply for this incentive, you or your solar installer will need to hire a New York State registered architect or professional engineer to file the paperwork with the Department of Buildings.