As a resident of Rockland or Orange County, 2016 is a great year to take advantage of NY solar incentives! As one of the best states in the country to go solar, you stand to save a great deal, both on the upfront investment and on long-term operating costs. Make sure you take advantage of as many NY solar incentives as possible to maximize your savings.
Federal Income Tax Credits
The first and most lucrative incentive is offered by the federal government for all qualifying installations across the US. All typical residential solar arrays qualify, whether you install one on a new or existing home, a primary dwelling or a secondary home. Only rental properties don’t qualify.
The tax credit is in the amount of 30% of the total cost with no upper limit. Originally, this impressive incentive was set to expire at the end of 2016, but it has officially been extended to December 2021 with decreasing tax credit amounts starting in 2020. For the most substantial tax break, be sure to act sooner rather than later!
NY Solar Tax Credits
Not every state offers its own tax credits for solar installations, but New York does! All typical residential arrays qualify, including those that are either purchased outright or financed with a lease or power purchase agreement.
New York State offers a 25% tax credit with an upper limit of $5,000. To claim this tax break, simply fill out form IT-255 when filing your income taxes. This incentive has been in place since 1997 and has no expiration date in sight.
Solar Power Rebates
The New York State Energy Research and Development Authority (NYSERDA) has a goal to support 3.175 gigawatts of solar energy by 2023. To incentivize this goal, the program provides solar power rebates for residential solar systems.
The incentive amount is scheduled to decrease gradually as the 2023 deadline gets closer and the $762 million budget gets used up. This means the faster you act, the more you stand to save. The most updated rebate rate is $0.70 per watt, or $3,500 for a typical 5 kilowatt (kW) array.
As if that wasn’t lucrative enough, New York residents who earn less than 80% of the median income in their county qualify for double the incentive rate! For example, if a family of four living in Orange County earns less than $69,360 per year, they qualify for $1.40 per watt up to a 6kW system for up to $8,400 in rebates! Check the NYSERDA website to see if you qualify for these extra incentives.
State Sales Tax Exemption
Normally, items purchased in New York are subject to sales tax, which can be as high as 8.875% depending on the local municipality. Solar panels are exempt from this sales tax, as are lease payments and electricity sales made through net metering.
Property Tax Exemption
Whether you own a single-family home or your share of a two-, three- or four-family dwelling, you can qualify for another of the great NY solar incentives. A variety of green energy solutions qualify for the property tax exemption, including solar water heaters, geothermal heat pumps, biomass and wind.
As you know, when your home’s value is appraised, any additions you make can increase its value and therefore increase the amount you owe on property taxes. New York State doesn’t want to discourage residents from going solar, so the increased value that solar panels add to your home don’t increase your property taxes for the next 15 years.
If you keep your solar array tied to the grid, you have the opportunity to take advantage of net metering. This is when you sell any excess electricity your solar panels produce back to your utility company. In some instances, utility companies credit your next month’s energy bill while others offer a monthly payout. If you choose the payout option, be sure to time it so you’re paid in the summer because the going rate for electricity is highest this time of year.
The amount you stand to save with net metering depends largely on the size of your system and how much electricity you consume. To save money upfront, you may choose to size your array close to or less than your home’s average monthly energy needs. The only way to regularly overproduce electricity is to size the system large enough that it exceeds your energy consumption.
When you calculate the potential savings from these lucrative NY solar incentives, it’s clear you have a lot to gain from switching to solar. Start the process today to maximize your savings. To keep from feeling overwhelmed, be sure to work with a NY solar company that has knowledge of these incentives and is willing to apply for them on your behalf.