Solar Panels and the State of New York
Solar energy systems are booming in the state of New York, growing 300% from 2011 to 2014, at a time when the nation as a whole experienced a 146% increase in solar energy systems. This is due in large part to recognition by the State government and local municipalities that the adoption of solar electric systems will not only help keep electric rates low, saving money for all New Yorkers, but also provide a boost to local economies. As of October 2015, solar energy systems are providing over 492 megawatts of power in New York State, with over 100 megawatts of solar in the queue, adding billions to the New York State economy.
Reforming the Energy Vision (REV) is Governor Andrew Cuomo’s strategy aimed at building a next-generation energy system that is clean, resilient, and affordable for all New Yorkers. The impetus for REV? The transitioning electric industry. As new technology emerges, renewable energy options, like solar, are becoming increasingly competitive price-wise with traditional fossil fuel energy sources. Combine a more affordable energy source with New York’s aging infrastructure, extreme weather events, system security and resiliency needs, and it becomes apparent that significant changes have to be made to the way that electricity is generated, distributed, managed, and consumed throughout the state.
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Available Incentives and Rebates in New York
Residents of New York are eligible for a mix of federal, state, and in some places, city incentives to support investments in installing solar energy. Accredited solar installers are familiar with available incentives and can help guide you through the process. In addition, many innovative financing solutions have emerged as well such as third-party ownership programs, often known as Power Purchase Agreements (PPA’s), Property Assessed Clean Energy (PACE), and group purchasing programs such as Solarize campaigns.
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.
NY-Sun Incentive: The NY-Sun Initiative provides incentives for installing solar electric systems distributed through 3 regions: Con Edison, PSEG Long Island, and The Balance of the State. Under theMegawatt 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 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 applies to solar-energy systems that utilize solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity. The exemption does not apply to solar pool heating or other recreational applications.
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.
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