NY Solar PV Incentive Guide: Residential
Federal, state and 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 residential building in NY. Many of these incentives are
tax related, and vary from case-to-case.
Federal
Federal Tax Credit: Residential building owners are eligible to receive a federal tax credit worth 30% of the cost of
the solar installation through 2019, at which point it drops to 26% in 2020, and 22% in 2021. Assuming the NY-Sun
Incentive is taxable income, the total installed cost of the system is the basis for calculating the federal tax credit. For
more information, visit: DSIRE . For example, the federal tax credit for a 7 kilowatt residential solar installation that
costs $35,000 would be $10,500. Some installers calculate the federal tax credit after the NY-Sun Incentive has been
taken. In either instance, it is important to speak with a tax professional to ensure all IRS rules are followed.
State
NY-Sun Incentive: The NY-Sun Initiative from NYSERDA provides incentives for installing solar electric systems.
Incentives are distributed through 3 regions: Con Edison, PSEG Long Island, and The Balance of the State (Update).
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.
Disclaimer: the authors
of this guide do not
provide tax advice. You
should consult your tax
professional to verify
your eligibility for tax
benefits.
In general, incentives for a typical residential or commercial system cover approximately 20-30% of the installed cost
of a PV system. Note the NY-Sun Incentive is paid directly to the installing contractor.
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 NY-Sun Incentive,
or $5,000. Be advised that the federal government considers this state tax credit taxable income. For more information,
visit: DSIRE
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 exemption does not apply to solar pool heating or other recreational applications. In addition, New
York City and some other local jurisdictions granted exemption from local sales and uses taxes for residential solar
energy systems but did not do so for commercial systems. 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 to December 31, 2016 are eligible for a four-year Tax Abatement of 5% per year of
the installed cost of the system, for a total of up to 20%. Abatements are applied after the NY-Sun Incentive, capped
at $62,500 per year or $250,000 total. This tax abatement is spread equally over four years, and may not exceed your
property tax liability for any given year. If you wish to apply for this incentive, you or your solar installer will need to
hire a New York State registered architect or professional engineer to file the paperwork with the Department of
Buildings. For more information, visit: NYC DOB Tax Abatement For example, the calculation for a 7 kilowatt solar
installation that costs $35,000 minus a $4,200 NY-Sun Incentive, would be:
($35,000 - $4,200) x 20% = $6,160 total PTA divided into 4 year increments
Sustainable
CUNY
th
555 West 57 Street, New York, NY 10019
www.sustainablecuny.org | [email protected]
Updated: January 2016