Have you been researching the benefits of solar panels? With fewer greenhouse gas emissions and the ability to lock in low utility rates for decades to come, it’s no surprise you’re interested in going solar. As you become more serious about making the switch, it’s important to research ways to save money, both on the upfront purchase and in the coming months and years.
Rockland and Orange County are some of the best places to live for solar incentives. You can take advantage of everything from tax credits and exemptions to net metering and rebates. Learn more about these New York State solar incentives so you’re sure to qualify for every lucrative opportunity available.
Federal Solar Tax Credits
The US government encourages homeowners to go solar by offering a 30% tax credit on solar purchases with no upper limit. This means when you file your taxes next year, you can decrease what you owe Uncle Sam dollar for dollar.
To get the full 30% tax credit, act by the end of 2019. The rate drops to 26% in 2020 and 22% in 2021 until the credits expire completely at the end of that year.
It’s easy to qualify for federal solar tax credits. If you own your home – whether it’s a primary residence or a secondary vacation home – you can claim the credit on next year’s tax return. Both new construction and existing homes qualify.
New York State Solar Tax Credits
Different states offer varying levels of solar tax credits, and New York’s are among the best. When you file your state taxes next year, you can claim a 25% tax credit on the cost to purchase and install your solar panels with a $5,000 upper limit. To claim these New York State solar incentives, simply fill out form IT-255 and include it with your income tax return.
Eligible residential solar installation are 25 kilowatts (kW) or smaller. Your panels must also be net metered and tied to the grid to qualify. Whether you finance your solar panels with a lease or purchase power agreement, or you pay upfront with cash, you can claim this tax break.
NYSERDA Solar Rebates
The New York State Energy Research and Development Authority (NYSERDA) offers cash rebates to residents and business owners who switch to solar. These New York State solar incentives are in place to help NYSERDA reach the goal of installing 3.175 gigawatts worth of solar panels by 2023.
The program’s impressive budget of $762 million has already begun to be paid out for qualifying residential installations, which include solar arrays smaller than 25 kW that produce no more than 110% of the building’s energy needs. Each qualifying residential solar array is eligible for an average rebate of $0.70 per watt, which comes to $3,500 for a typical 5 kW installation.
In late 2015, the solar rebate program was updated to provide double the incentives to households with lower incomes. If you earn less than 80% of your county’s median income, you may qualify for rebates of $1.40 per watt. This additional incentive is available for installations up to 6 kW. Check the income requirements for your county on the NYSERDA website to see if you qualify for these extra incentives.
Sales Tax Exemption
If you hate paying sales tax on everyday items, you’ll be pleased to learn that New York doesn’t tax the purchase of solar panels or electricity sales made through net metering. With sales tax rates as high as 8.875% depending on your municipality, the ability to forgo this tax provides a great upfront savings on your solar panel purchase.
Property Tax Exemption
If you own a home, you owe property taxes every year. When you install upgrades and make renovations, the value of your home increases, as do your property taxes – at least under normal circumstances. With this New York State solar incentive, the added value from installing solar panels doesn’t affect your property taxes for the next 15 years.
Solar panels installed on single- to four-family dwellings qualify for the tax exemption. You can also qualify by installing other energy-conservation improvements, such as a solar water heater, geothermal heat pump, biomass appliance or wind turbine.
As long as you remain tied to the grid, you have the chance to sell back excess energy from your solar panels to the utility company. Many utilities will credit your next month’s bill while others offer a yearly payout, which is most lucrative to schedule in the summer when electricity rates are at their highest. The larger your solar array, the more you stand to gain from net metering.