As of early 2015, about 600,000 homes in the US have solar panels, according to the Solar Energy Industries Association. You may be hoping to join the ranks because solar panels are a premier source of clean energy, but they cost a lot to get started – right? Aren’t solar arrays reserved for the wealthy elites and multimillion-dollar companies?
Solar panels in Rockland and Orange County may not come completely free, but there are many ways to defer the costs. You can afford to install a solar energy system on your New York home with the help of solar incentives, tax credits and financing options. Take a look at your options to see how you can achieve nearly free solar panels in NY.
Solar Incentive: Renewable Energy Certificates (RECs) and Net Metering
Some of the nation’s power companies are required to obtain a portion of their electricity from renewable sources. To facilitate this, many offer Solar Renewable Energy Certificates to solar panel owners. This excellent solar incentive helps people who purchase solar panels outright defer the costs quickly.
One certificate is equal to 1,000 kilowatt-hours of energy. The price fluctuates as energy costs go up and down, but NPR says they were selling for around $200 in February, 2015. The news organization also highlights one homeowner in Maplewood, New Jersey who accumulates enough excess energy from her solar array to sell about seven RECs per year.
Similar to RECs, net metering is when you sell back excess energy to your utility company. The Long Island Power Authority is one such utility that offers this incentive.
Solar Incentive: New York State Energy Research and Development Authority (NYSERDA)
This organization offers cash incentives to homeowners with 25-kWh or smaller arrays and businesses with 200-kWh or smaller arrays. Incentives are available on a first come, first served basis. Applications are accepted through December 31, 2015.
Solar Tax Credits: New York State Level
New York residents have several solar energy tax incentives to take advantage of after purchasing solar panels outright. These include:
- Income tax credit for 25% of the system’s cost up to $5,000.
- Exemption from state sales tax on the purchase of solar panel arrays.
- 15-year property tax exemption to prevent paying higher property taxes even though the addition of solar panels makes your property value go up.
Solar Tax Credits: Federal Level
The federal government incentivizes solar panels by offering a 30% tax credit with no upper limit on arrays installed on either existing homes or new construction. Principal residences and second homes qualify, but rentals do not.
Financing Option: Solar Panel Lease
The option to lease free solar panels in NY is a major reason this technology has seen such tremendous growth in recent years. Buying solar panels upfront may result in the greatest savings over the life of the array, but leasing opens the door to people who can’t afford the steep investment of an upfront purchase.
Leasing is a simple process, perfect for people who don’t want to spend time calculating and applying for incentives and tax credits available to people who purchase solar panels. Here’s how it works:
- You sign a lease agreement usually lasting 20 years.
- Solar panels are installed with no money down.
- You pay a fixed monthly rate to lease the panels and use the energy they produce, resulting in lower monthly costs compared to what you paid for electricity before installing the panels.
- If you want to expand your solar array in the future, you can do so at a discounted price.
- The system is guaranteed for 25 years, so if something goes wrong, your solar installer makes it right. This means your choice to go solar is very low risk and lucrative.
Financing Option: Solar Panel Loan
Solar loans offer another option for getting practically free solar panels in NY. The process is simple because the solar company takes care of collecting incentives and tax credits on your behalf.
Here’s how it works:
- You take out a 5- to 20-year loan from a solar panel installer in the amount of your entire solar panel system.
- The solar panel company applies for federal and state tax credits for the installation and subtracts the savings from your loan amount.
- Solar panels are installed and you have full ownership with no money down.
- You gradually repay the loan at a fixed monthly rate. You can also pay your loan off faster if you want without penalty.
- Begin saving every month with solar energy production and keep the panels for decades after you make your final loan payment.
Whether you choose to purchase outright and take advantage of solar incentives and tax credits, or a financing option sounds more appealing, it’s clearly possible to get practically free solar panels in NY.