Going solar is your chance to do your part for the environment, not to mention lower your electricity bills substantially for the next few decades. Every building with a roof or enough surrounding land has the potential to install solar panels!
You may wonder about the upfront costs associated with switching to solar. It’s true – paying for panels upfront with no financing or incentives can easily cost several thousand dollars.
But as a Rockland or Orange County resident, there’s no reason why you can’t take advantage of NY solar tax credits and other incentives to make your dream of going solar a reality! Here’s how much you stand to save:
Federal Tax Credits
Every eligible solar array installed in any state can claim tax credits from the federal government. To qualify, your panels can be installed on either a new or existing home. Both primary residences and secondary dwellings qualify. However, renters can’t claim this tax credit.
The amount offered by the federal government is 30% of the total cost, including installation, with no upper limit. This rate is good through 2019. After that, the tax credit drops to 26% through 2020, and 22% through 2021. The tax credits expire completely at the end of 2021.
Remember, tax credits aren’t exactly free money. However, they decrease what you owe in federal taxes dollar-for-dollar. This makes credits more lucrative than deductions which simply lower your taxable income. This means you can expect to receive 30% of the total cost you paid to purchase and install solar panels when you file your taxes next year.
Another important factor to consider is if you qualify for any solar rebates. This amount is deducted from the total before the 30% tax credit is applied. For example, if you spend $25,000 on a solar array and qualify for a rebate of $3,000, the remaining $22,000 is eligible for the 30% tax credit, which amounts to $6,600 in this instance.
NY Solar Tax Credits
Not every state offers their residents an additional tax credit, but New York does! To qualify, simply make sure your solar array is no larger than 25 kilowatts (kW). Condo owners and cooperative housing associations can install arrays up to 50 kW and still qualify.
Your solar panels must also remain grid-tied and net metered. Whether you purchase your system outright, lease it or finance with a power purchase agreement, you can qualify for NY solar tax credits.
The state offers a 25% tax credit of the total cost, including installation, with a $5,000 upper limit. This means even if you spend more than $25,000 on your solar array, you won’t receive more than $5,000 back from the state.
As with the federal incentive, New York tax credits act to decrease what you owe in state taxes at the end of the year. Just be sure to file New York tax form IT-255 when you complete your income taxes to receive a credit for 25% of your solar installation cost.
Other Ways to Save
Tax credits are certainly some of the most lucrative ways to save when you switch to solar, but don’t forget about these other opportunities to lower your upfront and continuing costs.
New York Solar Cash Rebates
Qualifying installations can receive a cash rebate of $0.70 per watt, or $3,500 for a typical 5 kW array. Low- to moderate-income individuals may qualify for double this rate on installations up to 6 kW – that’s up to $8,400 in cash incentives! Unlike tax credits, these solar rebates are money right back in your pocket.
Sales Tax Exemption
When you buy goods and services in New York, your purchase is subject to sales tax, which can be up to 8.875% depending on where you make your purchase. This exemption results in up to $2,220 you are exempt from paying on a $25,000 solar array.
Property Tax Exemption
When you make home improvements, the value of your home goes up. This is good news for selling your residence, but it also increases your property taxes. Thanks to this exemption, the increased value solar panels lend to your home won’t increase your property taxes for the next 15 years. This results in great savings over time.
If you keep your solar array tied to the grid, you can sign up for net metering which allows you to sell back any excess electricity your system generates to the utility company. If you install an oversized system, you can expect your solar panels to produce more electricity than you consume on a regular basis, granting you more benefits from net metering.
When you’re ready to take advantage of these NY solar tax credits and other incentives, get in touch with a solar installer in Rockland and Orange County.