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NY Solar PV Incentive Guide: Commercial
Federal, New York State and New York City financial incentives are available to support investments in solar. Below
is an overview of the incentives available for installing a solar electric system on a commercial building in NY. Many of
these incentives are tax related, and vary from case-to-case.
Federal
Federal Tax Credit: You are eligible to receive a federal tax credit worth 30% of the cost of the solar installation.
Assuming the NYSERDA incentive is taxable income, the total installed cost of the system is the basis for calculating
the federal tax credit. Example, the federal tax credit for a 60 kilowatt commercial solar installation costing $350,000
with a $50,000 NYSERDA incentive would be:
($420,000 - $50,500) X 30% = $110,850 federal tax credit
If this tax credit exceeds your federal income tax liability the year the solar energy system is installed, you may carry
the tax credit forward through 2016. For more information, visit: DSIRE
Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation:
Companies that invest in a solar energy system may be eligible for federal income tax
deductions through the Modified Accelerated Cost-Recovery System (MACRS). The IRS
allows commercial solar PV system owners to deduct up to 85 percent of their tax basis.
This form of depreciation can be claimed over a five year period. For more information, visit:
IRS Publications and DSIRE
State
Disclaimer: the authors
of this guide do not
provide tax advice. You
should consult your tax
professional to verify
your eligibility for tax
benefits.
NY-Sun Incentive (PV system size 200 kW or less): The NY-Sun Initiative provides incentives for installing solar
electric systems throughout NYS. Incentives are distributed through 3 regions: Con Edison, PSEG Long Island, and
The Balance of the State (Update). NYPA customers are based on the utility operating in your region.
Under the Megawatt Block incentive structure, each region and sector (commercial vs residential) is assigned a series
of MW targets at certain incentive levels, referred to as “blocks.” As applications are submitted, incentives are
assigned and the kW associated with the applications are added together and the units are converted to MW. When
the MW target for that block is reached, the block is closed and a new block, with a new target and a lower incentive
level, is started. Once all of the blocks for a particular region and sector are filled, an incentive for that region and
sector will no longer be offered. View real time available incentives by block on the Megawatt Dashboard.
Systems that are greater than 200kW may still apply but are only eligible for funding up to the 200kW level. In
general, incentives for a typical residential or commercial system cover approximately 20-30% of the installed cost of
a PV system. Note the NYSERDA incentive is paid directly to the installing contractor.
NY State Sales Tax Exemption: The law exempts the sale and installation of commercial solar energy systems
equipment from state sales taxes, and allows municipalities and cities to exclude these costs from local sales tax. In
addition, some local cities have exempted commercial systems from the local sales tax but NYC has not. DSIRE
New York City only
New York City Property Tax Abatement (PTA): Building owners who place a grid-connected solar energy system
into service from January 1, 2014 through December 31, 2016 are eligible for a four-year Tax Abatement of 5% per
year of the installed cost of the system for 4 years (total of 20%). Abatements are capped at $62,500 per year or
$250,000 total, applied after the NYSERDA rebate. This tax abatement may not exceed your property tax liability for
any given year and application requires filing of paperwork at the Department of Buildings by a registered architect or
professional engineer. For more information, visit: NYC DOB Property Tax Abatement for Solar
Example calculation for a 60 kilowatt solar installation that costs $420,000 minus a $50,500 incentive from
NYSERDA, would be:
($420,000 - $50,500) x 20% = $73,900 total PTA divided into 4 year increments
Sustainable CUNY
255 Greenwich St, 5th Floor New York, NY 10007
www.sustainablecuny.org | [email protected]
Updated: November 2014