2015 is a great year to go solar. Not only are solar panels more efficient and durable than ever before, but you have access to some of the best solar tax credits in Orange County, NY this year. Remember, tax credits aren’t exactly free money, but you can use them to lower what you owe in taxes dollar for dollar. This makes them far more lucrative than tax deductions, which simply lower your taxable income.
Take a look at what options are available that you may qualify for. Then, work closely with a New York solar panel installer to make sure you fill out all the necessary paperwork to enjoy as many lucrative tax credits and incentives as possible.
New York Solar Energy Tax Credits
Different states offer varying levels of tax credits for solar panel installations. Some states offer no incentives at all, which puts a serious damper on those states’ renewable energy goals. Fortunately, New York has a goal of reaching 3.175 gigawatts of solar panel installations by 2023. To help reach this goal, the state offers an excellent solar energy tax credit.
The incentive ranks among the highest of any state with a 25% tax credit, which you can claim for both the purchase and installation cost. A cap of $5,000 has been placed on the tax credit, meaning if you invest in a solar array that costs more than $25,000, you still can only claim a $5,000 tax credit.
Most residential solar installations qualify for this solar tax credit in Orange County, NY. All you need to do is install a system under 25 kilowatts (kW) and remain tied to the grid. You can also qualify regardless of whether you purchase your panels outright, lease your panels or sign up for a purchase power agreement.
Federal Tax Credits
Everyone in the country has access to federal tax credits. These are available for new solar panel installations through December 2016. Federal tax credits are the government’s way of incentivizing the beneficial switch to solar energy.
The tax credits cover 30% of the purchase and installation cost. Unlike solar tax credits in Orange County, NY, federal tax credits don’t have an upper limit. This means you could invest any amount in solar panels and still receive the full 30% tax credit. For a typical $25,000 installation, this comes to $7,500 in tax credits! Clearly, this is a powerful reason many people consider going solar.
It’s important to realize that if you claim any rebates from the state, you must subtract the rebate amount from the total cost and calculate your 30% tax credit from there. For example, a $25,000 solar installation may qualify for a $3,500 rebate. If so, this brings the total investment down to $21,500. A 30% tax credit off of this new total is $6,450.
Qualifying for federal tax credits is pretty straightforward. Both new construction and existing homes qualify, but you must own, not rent, your home. Secondary residences also qualify for the tax credit.
Solar tax credits in Orange County, NY are a huge reason to go solar, but don’t limit your benefits to tax credits alone. You can also qualify for other types of incentives that could save you money now and well into the future. These include:
- NYSERDA rebates: Cash incentives based on the size of your solar installation are available through the New York State Energy Research and Development Authority. Rates fluctuate and will continue to drop as the program’s expiration date in 2023 approaches, but as of May 2015, the rate is $0.70 per watt. This means you could claim $3,500 in rebates for a typical 5kW system.
- Sales tax exemption: New York state doesn’t collect sales tax on solar panel purchases, so you don’t have to worry about this tax increasing your initial purchase price.
- Property tax exemption: Installing solar panels increases the value of your home by an average of $20,000. Ordinarily, this would increase your property taxes, but the property tax exemption prevents this from happening for the next 15 years.
- Net metering: If your solar panels ever produce more energy than you need in your home, you can sell it back to the utility company with a process known as net metering. You are credited for the excess energy on your next month’s utility bill.
Are you excited about these solar tax credits in Orange County, NY? The other incentives are exciting possibilities as well. You might qualify for all of them, but the only way to know is to work with an installer who can help you qualify and then apply on your behalf.