New York 2022 Solar Tax Credit and Other Incentives

In recent years, New York has emerged as one of the hottest markets in the United States for solar panel installations. Whether it’s because of the generous New York Solar Energy Tax Credit offered to homeowners, the ambitious clean energy goals of politicians across the state, or because New Yorkers are simply seeing the climate benefits. and economical in installing solar photovoltaic panels, the Empire State sets an excellent example for the rest of the country.

For anyone looking to switch to solar power, it can be difficult to comply with the exact policies, such as New York’s solar incentives and rebates. New policies are put in place regularly, local incentives vary from jurisdiction to jurisdiction, and if you’re not actively working in the solar industry it can be a bit confusing.

To make sure you don’t miss out on any of the incentives and potential benefits of installing solar panels in your New York home or business, keep reading to see the top New York State solar tax credits and benefits. other incentives to keep in mind when investigating if solar is for you. If you want to get a quote from a shortlisted installer near you and see how much you can save with these incentives, you can do so using this tool or the form below.

New York Solar Tax Credit

The equipment credit for the solar power system is perhaps the biggest solar incentive in New York State.

As explained by the New York State Department of Taxation and Finance, this tax credit is available to anyone who engages in a new solar project for their place of residence, whether by purchasing solar power system equipment, signing a solar lease or even committing to a contract to purchase solar energy. Solar energy electricity produced by equipment belonging to another entity (if this contract extends for 10 years or more).

For any of the above solar power commitments in New York City, the person purchasing or signing the lease or PPA is eligible for a state tax credit of up to $ 25. % of total expenses (up to a limit of $ 5,000).

It’s important to note that the New York Solar Tax Credit is non-refundable, which means it reduces your tax payable but is not paid directly if this credit exceeds your expected tax payments. However, any excess credit can be carried forward on future tax returns for up to five years.

New York Solar Discount

Another very notable and beneficial incentive for solar purchases is the New York Solar Rebate, known as NY-Sun Megawatt (MW) Block Incentive. Unlike the solar tax credit, this program applies not only to residential solar systems, but also to non-residential, industrial and commercial solar installations.

Specifically, the NY-Sun initiative offers up-front rebates for installed solar systems on a “dollars per watt” ($ / W) basis in the form of a direct cash rebate. The exact amount a new facility can expect to receive is dictated by the New York region it is in, how many rebates allocated in that region have already been paid, the size of the system, and the timeframe within which installation is complete.

Typically, however, the New York solar rebate starts from 15 cents per watt and can go up to $ 1 per watt, which is more than half the cost of installing solar power in the city. best of times.

Other solar incentives in New York

While the New York Solar Rebate and the Solar Power System Equipment Credit are the two most critical policies that have prompted solar power in the state, potential facilities may also benefit from key incentives. additional. The table below highlights these opportunities, which are developed in the following sections.

New York Solar Power Sales Tax Exemption

New York State imposes a 4% sales tax on most products and merchandise sold in the state. However, to break down barriers to entry for homes or businesses wishing to invest in solar energy, this tax no longer applies to solar equipment and installations for residential systems since 2005.

This exemption reduces the total cost to potential buyers of solar power and serves to make solar power more affordable with a shorter payback period for a larger portion of the population, in line with New York City targets for the ‘increase in renewable energies.

Net Metering in New York

New York State allows net metering for residential solar systems up to 25 kilowatts, agricultural systems up to 100 kilowatts, and non-residential systems up to 2 megawatts. The original net metering provision passed in 1997 only applied to the first 10 kilowatts of a solar system, but has since been extended several times as the New York government considers its short and long goals. long term to make solar energy more viable and more widespread across the state.

Net metering is a system by which customers who own solar systems can be paid directly (or offset their electricity bills) by returning excess energy generated by their solar panels to the local power grid. While all solar systems create a benefit for homeowners by allowing them to freely consume the energy they generate, net metering allows for more profit during times when they are not consuming all the electricity they are actively producing. .

Local incentives

In addition to the statewide incentives available to potential solar systems across New York City, many cities and counties will also offer incentives such as tax credits, rebates, or the like that can be layered on top of the incentives. state, serving to move the needle to affordability even further.

One of the most popular local incentives is a solar property tax exemption. Each New York City municipality can decide whether it wants to participate in the property tax incentive program, and many have chosen to do so. This means homeowners in most areas of the state don’t have to pay increased property taxes after solar panels increase the value of their homes.

Federal solar tax credit

In addition to all of the state and local incentives for solar power that are readily available to New Yorkers, state solar installations are also eligible for the federal solar tax credit. The federal government allows all solar systems installed by 2023 to receive a non-refundable tax credit based on the value of the system (which includes the cost of the equipment itself and the cost of its installation) and when installation is complete.

For all systems commissioned by the end of 2022, the federal solar tax credit is equal to 26% of the cost of the installation. For all systems commissioned until 2023, the credit drops to 22% of the system. Currently, systems installed in 2024 or later are not eligible for the federal solar energy tax credit, although Congress may choose to extend these timelines as has been done in the past.

FAQ: Solar Incentives in New York

Does New York State have a solar tax credit?

Yes, there is a solar tax credit in New York. The Solar Power System Equipment Credit is a 25% (up to $ 5,000) non-refundable tax credit available to homeowners who purchase, lease or join solar power through a contract of. purchase of electricity.

Will there be solar incentives in New York in 2022?

Yes, New York will continue to offer solar incentives in 2022, including the Solar Power System Equipment Credit, NY-Sun MW Block Incentive, state tax incentives, and availability for billing. net, as well as federal tax credits and any other relevant local. solar incentives.

Is it worth going solar in New York?

New York State has made the already financially prudent decision to switch to even more accessible and viable solar power through its various tax credits, rebates and policies that lower the total cost of installing the solar energy. Taken together, these measures serve to reduce the costs of the solar system in New York City, making it a worthwhile investment.

Are solar panels free in New York?

No, solar panels are not free in New York City, although there are plenty of solar incentives available for both residential and non-residential installations, reducing upfront costs and working to make solar investments accessible to more of New York City. Yorker.