Federal and New York State Solar Electric Incentives:
- The Net Metering law
- Newly revised tax credits
- New York State rebates
NYSERDA rebates and tax incentives can substantially reduce system costs.
I. Net Metering – Your electric meter runs in reverse when your solar system generates more electricity than is being used. You pay for only the NET amount of electricity that you buy from the utility. See our Benefits page for a more detailed explaination. New York State now also allows Net Metering for commercial, non-profit and municipal systems up to 2 megawatts in capacity.
II. Income/Tax Credits – For residential solar systems, New York State provides an income tax credit for up to 25% of the system cost, with a maximum of $5,000.
The federal government provides a 30% tax credit for both residential and commercial solar systems. Please discuss all tax matters with a financial professional.
III. Incentive Rebates – NYSERDA currently offers the following rebates for solar electric installations:
- Residential – $1.30 per watt, up to 25 kW. This adds up to $13,000.00 for a 10kW system, or $32,000 for a 25kW system.
- Commercial / Not for Profit – $1.30 per watt, for the first 50kW of systems size, and$.90 per watt for the remaining system size up to 200kW. This adds up to $65,000.00 for a 50kW system, and would be a total of a $200,000 rebate for a 200kW system.
The following information about NYSERDA’s Solar Photovoltaic (PV) program is taken directly from the PON-2112 Program Manual:
The New York State Energy Research and Development Authority (NYSERDA) provides incentives for the installation of new grid-connected solar photovoltaic (PV) systems. System incentives are capped at 25kW per site/meter for residential systems, 200kW per commercial site/meter, and 200kW per site/meter not-for-profit applicants. Funding for the Solar Electric Incentive Program (“Program”) has been allocated by the New York State Public Service Commission through the Renewable Portfolio Standard program. The goal of the program is to install 82 MW or 93,806 MWh’s of Solar Electric Power systems. Incentives will be granted on a first-come, first-served basis, and applications will be accepted through December 31, 2015, or until funds are fully committed, whichever comes first.Incentives are available on a first-come, first-served basis. Incentives will only be reserved for customers once an application has been approved by NYSERDA. Incentives will be available for the PV Program at a rate of $2,000,000 per month starting in July 2010 through December 2015. The individual project incentive rate will be $1.30 per Watt for residential applications, and a two tiered incentive rate for commercial / not for profit applications with a $1.30 rate for the first 50kW of system size, and $.90 for the remaining system size up to 200kW. Incentives are subject to change on a bi-monthly basis, depending upon demand during the previous two months.
Please note that NYSERDA offers its incentive program subject to the following restrictions:
- The PV system must be grid-connected.
- Incentives are available for PV systems installed for qualified customers only. Qualified customers are those who pay the Renewable Portfolio Standard (RPS)/System Benefits Charge (SBC) as part of their electricity bills. To see whether your utility company participates, please refer to this NYS Department of Public Service webpage. All New York State investor-owned utilities, including Central Hudson, NYSEG and National Grid, participate in this program.
- NYSERDA reserves the right to limit the number of incentives per customer/site/meter.
- Incentives are based on direct current module ratings at standard test conditions (STC).
- System sizes may be greater than the maximum size allowed for incentives, however, the incentives will be provided only for the eligible portion of the PV System.
- NYSERDA reserves the right to make changes in the incentive levels. It is anticipated that these changes may occur at two month intervals based on the level of participation in the program and market conditions. Any revisions in the incentive levels will be posted on NYSERDA’s website, and Eligible Installers also will be informed via email. Customers’ applications that are accepted by NYSERDA after an incentive change will be automatically changed to the new incentive level. NYSERDA anticipates that incentives may be increased or decreased by $0.25 per watt at the beginning of a given bi-monthly period. Eligible Installers and Customers are prohibited from cancelling and re-applying if incentives are increased.
- Incentives are capped based on the proposed PV System size that does not exceed 110% of the total kWh consumption for the previous 12 months of electric usage. New Construction systems must be sized not to exceed 110% of the calculated yearly projected kWh of electric usage.
- Additionally, the incentive cannot exceed 40% of the owner’s net out-of-pocket costs after deducting for any federal and state tax credits or federal payments in lieu of tax credits. The installer shall include calculations supporting the requested incentive amount.
- Incentives will be reduced in proportion to output losses when losses from factors such as shading and orientation exceed 20% of ideal kWh output.
- Residential customers may be eligible to participate in any loan programs such as PACE (Property Assessed Clean Energy, On-bill financing, the NYS Energy $mart Loan Fund(sm), should they be available in the future. For customers that participate in the loan programs, the incentive will be reduced by the equivalent “buy down” cost or other cost incurred by NYSERDA to make the loan product available. The total incentive for any customer, including cash and loan product, will not exceed the system capacity in kW times the per kW incentive.
Please note that these incentive rebates and tax credits listed are conditional, and based upon your unique site, and financial situation. Mountaintop Greene Clean Energy lists these options as a service to homeowners, but all of these options must be discussed with an accountant. All of these options can change at any time, and some are time sensitive. Please discuss these options with a professional accountant.
Only the NYSERDA Incentive Rebates will be included in your Mountaintop Greene Clean Energy Proposal, as these will be reserved by NYSERDA upon NYSERDA’s acceptance of the Incentive Rebate Application. Although unusual, NYSERDA can reduce, or refuse to award Incentive Rebates based upon factors including the amount of shading, or array orientation at the site. Less than optimum site conditions that would result in reductions in NYSERDA Incentive Rebates would be discovered and discussed at the initial Site Assessment, and can often be remedied.
Be aware that deductions regarding New York State and Federal Tax Credits are not predetermined. Not all residents will qualify for these Tax Credits, Please exersize due diligence in discussing all Tax Credits with your accountant.
New York State Tax Credits
New York State offers a tax credit of 25% of the system “expenditures” (after any incentives have been applied), capped at $5,000. This is only for grid-connected, primary residences. Here is a link to NYS tax form IT-255. This credit can be “rolled over” for up to 5 years, or until the entire amount is claimed, whichever comes first.
Federal Tax Credits
The Federal government offers an income tax credit of 30% for residential systems. Due to recently passed legislation, there is now no cap on the maximum amount that may be claimed. As such, this credit can offset a significant amount of the “total” or “basis” project cost (a term which the Solar Energy Industry Assocation (SEIA) interprets to mean before any incentives have been applied). To claim the credit or for more detailed information, refer to Federal tax form 5695. The 2010 form states If you cannot use all of the credit because of the tax liability limit…, you can carry the unused portion of the credit to 2011. This credit can then be carried on to subsequent years up until 2016.
New York State Property Tax Exemption
Section 487 of the Real Property Tax Law exempts from taxation, but not special ad valorem levies or special assessments, real property which includes a solar or wind energy system or farm waste energy system satisfying guidelines established by NYSERDA. The solar or wind energy system or farm waste energy system must be existing or constructed before July 1, 1988 or constructed after January 1, 1991 and before January 1, 2015.
A county, city, town or village may adopt a local law or a school district (except the city school district of New York City, Buffalo, Rochester, Syracuse or Yonkers) may by resolution provide that no solar or wind exemption or farm waste energy system shall apply within its jurisdiction for systems constructed after January 1, 1991 or the date of such local law or resolution, whichever is later. The exemption is equal to the increase in assessed value of the property attributable to the inclusion of the solar or wind energy system or farm waste energy system and is to be granted for a period of fifteen (15) years. Where the system or its components are also part of the building structure, the increase in value to be exempted from taxation equals the assessed value attributable to the system or components multiplied by the ratio of the incremental costs of the system or farm waste energy system or components to the total cost of such system or components. “Incremental cost” is the increased cost of a solar or wind energy system or farm waste energy system or component which also serves as part of a building structure, above that for similar conventional construction, which enables its use as a solar or wind energy system or farm waste energy system or component. For further information, see NYSERDA guidelines. Note that municipalities that offer the solar or wind energy system exemption may require payments in lieu of taxes not to exceed the amount of the exemption.To claim the exemption, the property owner must submit form RP-487 from the New York State Office of Real Property Services (ORPS) to the city or town assessor.
New York State Residential Solar Sales Tax Exemption
New York enacted legislation in July 2005 exempting the sale and installation of residential solar-energy systems from the state’s sales and compensating use taxes. The exemption applies to solar-energy systems that utilize solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity. The New York Department of Taxation and Finance has issued a small amount of additional guidance and instructions on how to claim the exemption in Publication TSB-M-05(11)S. Mountaintop Greene Clean Energy can help guide you through the process of filing this exemption with the help of your accountant. Here is a copy of NYS Tax Form ST-121.