June 2022 - Solar Incentives in New York
New York has recently emerged as one of the most popular solar panel installation markets in the United States. The Empire State is setting a terrific example for the rest of the country. Some of the reasons for this mass solar adoption are the New York solar incentives and credits offered to homeowners and businesses and the state's aggressive clean energy targets. New Yorkers realized the climatic and economic yields and benefits of installing solar PV panels.
New York boasts some of the country's most aggressive solar subsidies making solar an attractive investment in New York. Below are some of the cash incentive programs:
NYSERDA NY-Sun Initiative:
NY-Sun is an umbrella statewide incentive program to increase clean, renewable solar energy capacity throughout the state. It includes several home and business financial incentives to make going solar more affordable and a sweet deal.
- The Megawatt Block Incentive is a NY-Sun direct cash incentive for solar energy for both business and residential solar panel systems. The program offers an upfront dollar-per-watt ($/W) rebate. The grant amount depends on the size (Watt DC), the current Megawatt block goal, the location, and whether a building is classified as commercial or residential according to the utility. As of January 2022, the incentive values range from $0.20/W (ConEdison) to $0.50/W (Upstate). These incentives are designed to decrease over time as certain solar markets develop and become self-sustaining.
- Multifamily Affordable Housing Adder: Additional incentives are available for affordable housing that meets the program's affordability component. Incentives for low-to-moderate-income (LMI) multifamily are $2.00/Watt for Con Edison, $1.60 for Con Edison (non-CDG projects), and $1.00/Watt for Upstate & Long Island.
Sample Estimated Incentive for Con Edison 25 CDG kW System on Regulated Affordable Housing Property:
$110,000 - Total System Cost Before NYSERDA Incentives
- $50,000 - MW Block Incentive + Multifamily Affordable Housing Adder (combined $2.00/Watt)
= $60,000 - Total System Cost After NYSERDA Incentive
Below are some other non-cash incentives for solar:
Federal Solar Investment Tax Credit (ITC): The Investment Tax Credit (ITC) can cut the cost of your PV solar energy system by 26% (for systems placed into service by end of 2022). The credit is reduced to 22% of the system for all systems installed through 2023. As of now, systems installed in 2024 or later are ineligible for the federal solar tax credit, though Congress may choose to extend those deadlines in the future, as it has in the past. Abatements are applied after the NY-Sun Incentive and capped at $62,500 per year or $250,000 total. The ITC only applies to those who purchase their PV system outright (via cash purchase or solar loan), and you must have a sufficient income for the tax credit appetite for this incentive to be meaningful.
New York State Tax Credit
Residential building owners who install solar may be eligible for a tax credit for the lesser of 25% of the installed cost of the solar energy system (up to 25 kW on net-metered systems) after the NYSERDA incentives, or $5,000.
- The Solar Equipment Tax Credit has two significant advantages: first, you don't have to purchase your system to claim the credit (it applies even if you went solar with a lease or PPA), and second, if your tax liability isn't large enough to claim the entire credit in the first year, you can roll it over into the following year.
Modified Accelerated Cost-Recovery System (MACRS): Depreciation deductions can assist businesses in recouping their investments in specific property renewables. Since 1986, most types of solar properties have been subject to a 5-year timetable. Bonus depreciation was increased to 100% under the Tax Cuts and Jobs Act of 2017 for qualifying property acquired and placed in operation after September 27, 2017, and before January 1, 2023
Net Metering (exporting your solar production): Net metering is a critical policy that ensures you are paid a fair price for the solar electricity you send into the grid. Any credits for excess solar power that you accumulate are saved in a "credit bank" and can be used in future months (usually winter) if your solar energy system produces less electricity. Net metering is permitted in New York State for residential solar systems of up to 25 kW, farm systems of up to 100 kW, and non-residential systems of up to 2 MW.
Please contact us here if you are interested to obtain a solar estimate for your property. Our total solutions team will ensure that you maximize and realize all available incentives for your asset.
Thank you,
STRATCO Property Solutions
