At first glance, New York State may not seem like the ideal location for rooftop solar energy. The Empire State is not particularly well-known for abundant sunshine. However, factors such as high utility rates and the state’s supportive solar incentives make going solar in New York State an advantageous long-term investment.
This article will delve into the following aspects:
- Pros of going solar in New York: An exploration of the benefits associated with adopting solar energy in the state, including potential cost savings and environmental advantages.
- Cons of going solar in New York: A consideration of potential challenges or limitations associated with solar energy adoption in the state, such as weather conditions and initial installation costs.
- NY solar incentives: An overview of the various financial incentives and programs available to New York State residents who choose to install solar panels.
- Frequently asked questions: Answers to common questions and concerns regarding solar energy in New York State, such as installation procedures, maintenance requirements, and return on investment.
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Pros of Going Solar in New York State:
- Cost Savings: Over the long term, solar energy can lead to significant reductions in electricity bills. In New York, homeowners typically see a return on investment within 5 to 8 years.
- Increased Property Value: Studies show that homes with solar panels tend to sell for higher prices.
- State Incentives & Tax Credits: New York offers a variety of rebates, tax breaks, and incentives to encourage solar adoption, making it a financially attractive option.
- Reliability and Low Maintenance: Solar panels require minimal upkeep, and their energy production is not affected by power outages, providing a reliable source of electricity.
- Environmental Benefits: Harnessing the sun’s energy reduces reliance on fossil fuels, resulting in lower greenhouse gas emissions and a cleaner environment.
- Net Metering: New York’s net metering policy allows homeowners to receive compensation for any excess solar electricity they generate and send back to the grid.
- Resiliency: During grid outages, such as those caused by extreme weather events, solar systems with battery storage can provide backup power.
Cons of Going Solar in New York State:
- High Upfront Cost: The initial investment for a solar panel system can be substantial, although government incentives and financing options can help mitigate this.
- Weather Dependency: Solar energy production is directly influenced by sunlight availability, so cloudy or snowy days can impact electricity generation.
- Size and Space Requirements: Installing solar panels may require significant roof space or the installation of ground-mounted systems.
- Permitting and Approvals: Obtaining necessary permits and approvals for solar installation can involve paperwork and time.
- Impact on Aesthetics: Some homeowners may find the appearance of solar panels on their roofs to be aesthetically unappealing.
- Maintenance and Repairs: While solar panels require minimal maintenance, occasional cleaning or repairs may be necessary.
It’s important to note that these pros and cons are general considerations and specific benefits or challenges may vary depending on individual circumstances, location, and system size.
| PROS | CONS |
| Home solar is cheaper than buying grid electricity | New York isn’t especially sunny |
| Tax-free increase in home value | Need cash or access to financing |
| Lower carbon footprint | Panels (usually) stay with home if you move |
| Contribute to a cleaner, more resilient grid | |
| Robust slate of federal and state incentives | |
| 1 to 1 net metering |
Despite receiving lower amounts of sunlight compared to many other parts of the country, New York State has emerged as a leader in the adoption of residential solar energy and is forecasted to experience the sixth-highest growth over the next five years. The driving factors behind this development are the state’s high electricity prices and favorable solar incentives. In simpler terms, the cost of generating solar electricity has become more economical in New York State, making it a viable alternative to traditional grid electricity.
To better understand how this plays out in reality, we will analyze a genuine quote provided to a solar.com customer in Brooklyn.
Solar cost advantage over traditional electricity in New York State
Solar energy is a worthwhile investment for New York State residents, as it can lead to substantial savings on electricity over the lifespan of a solar system.
Despite the initially high cost of solar systems, comparing the price per kilowatt-hour of solar energy to that of traditional grid electricity reveals solar as the more cost-effective option.
To illustrate this point, let’s examine an actual solar and battery quote provided by solar.com to a customer in Brooklyn, NY, and compare it to the cost of traditional grid electricity.
| 7.6 KW SOLAR SYSTEM | AMOUNT |
| Gross price | $36,740 |
| NYSERDA rebate and cash discount | -$7,856 |
| Contract price | $28,884 |
| State and federal solar tax credits | -$13,665 |
| Net cost | $15,219 |
Based on factors such as the average sunlight exposure, roof angle, and anticipated panel degradation over time, the 7.6 kW solar system is estimated to generate 10,141 kilowatt-hours (kWh) of electricity yearly and 233,329 kWh over 25 years.
Considering the project’s net cost and lifetime production, the cost of residential solar plus battery storage for this Brooklyn consumer is estimated to be 6.5 cents per kWh. Adding 11.4 kW of battery storage at a cost of $10,000 (after discounts and tax credits) raises the cost to 10.7 cents per kWh.
In comparison to the cost of residential solar energy, let’s examine the price of grid electricity.
Solar vs Grid Energy Prices in New York
| SOURCE OF ELECTRICITY | COST OF ELECTRICITY (CENTS/KWH) | COST PER YEAR OF 10,141 KWH OF ELECTRICITY |
| Solar.com – solar only | 6.5 | $659 |
| Solar.com – solar + battery storage | 10.7 | $1,085 |
| Grid – New York State average | 21.63* | $2,193 |
In New York, comparing solar energy with battery storage to grid electricity reveals significant cost-effectiveness. Installing solar panels can help secure electricity costs at a consistently low rate, much like purchasing a house as opposed to paying constantly rising rent.
From 2017 to 2022, the average annual increase in electricity prices across the state was 3.57%. Here is a comparison of the costs associated with solar energy and grid energy in New York over a 20-year period, taking into account 1:1 net metering and the CBC fee.
Going solar is a fantastic investment that can save homeowners a significant amount of money on their electricity bills. It is similar to buying electricity in bulk, but instead of purchasing it from the utility company, you’re generating it on your property.
While there is an upfront cost to installing solar panels, the long-term savings far outweigh the initial investment. In fact, a study by the National Renewable Energy Laboratory found that solar panels can provide a return on investment of up to 20%.
There are many benefits to going solar. In addition to saving money, solar panels can increase your home’s value, reduce your carbon footprint, and provide you with energy security.
If you’re considering going solar, there are a few things you should keep in mind. First, you need to ensure that your home is suitable for solar panels. Second, you need to get quotes from multiple solar installers to compare prices and services. Finally, you need to decide how you want to finance your solar installation.
There are several different ways to finance a solar installation. You can pay for it upfront, take out a loan, or lease the panels. The best option for you will depend on your financial situation and goals.
If you’re ready to start saving money on your electricity bills, going solar is a great option. With a little planning, you can find a solar installation that meets your needs and budget.
Here are some additional benefits of going solar:
- Reduce your reliance on fossil fuels: Solar energy is a clean and renewable source of power, so going solar can help you reduce your reliance on fossil fuels.
- Support local businesses: Solar installers are often local businesses, so going solar can help support your community.
- Feel good about doing your part: Going solar is a great way to reduce your environmental impact and make a positive difference in the world.
| PROJECT TYPE | BREAK-EVEN POINT | 20-YEAR SAVINGS |
| Solar-only (cash) | Year 6-7 | ~$45,000 |
| Solar-only (20-year loan) | Day 1 | ~$35,000 |
Of the total cost savings from installing a 7.6 kW solar system, a significant amount is attributed to New York State’s solar incentives, which will be discussed later in the article. Suppose, for the sake of argument, that you paid the full retail price of $36,740 for the solar system. Even in that case, you can still save more than $25,000 over a period of 20 years.
Solar Panels and Battery Storage Increase Home Value in New York State
Installing solar panels and battery storage at your home can have numerous benefits, including financial savings and increased property value. In New York State, this is particularly true, with homes in New York City selling for a significant premium if they have solar panels.
According to data analyzed by Zillow, homes in New York City with solar panels sold for 5.4% more than comparable homes without them. That’s higher than in any other major metropolitan area in the country and exceeds the national average of 4.1%. For a median-priced home in New York City in 2022, solar panels would add approximately $37,800 to the sale price.
In addition to the financial benefits, installing solar panels can also make your home more resilient and sustainable. With solar panels, you’ll be able to generate your own electricity, reducing your reliance on the grid. This can be especially beneficial during power outages when you can still have access to electricity for essential appliances and devices.
If you’re concerned about solar panels increasing your property taxes, most of New York State offers a 15-year property tax exemption for solar systems. This means you’ll still have to pay property taxes, but the value of your solar system won’t increase your tax rate unless your local government opts out.
Even better, New York City has the Solar Electric Generating Systems Tax Abatement Program, which can reduce your property taxes by up to 30% of the project cost. This program is available to homeowners, businesses, and non-profit organizations.
Overall, installing solar panels and battery storage is a financially sound and environmentally friendly investment that can increase the value of your home, especially in New York State. With the various financial incentives and benefits available, it’s a great option for homeowners looking to save money on electricity, reduce their carbon footprint, and make their homes more resilient.
New York State Using Solar Energy For a Cleaner Future
In June 2023, natural gas accounted for over half (50%) of New York State’s electricity generation. However, it is important to note that natural gas emits 12 times more lifecycle emissions per kilowatt-hour (kWh) when compared to rooftop solar energy.
Natural gas, composed primarily of methane, is a significant contributor to climate change. Methane has a warming impact 80 times greater than carbon dioxide, and natural gas is responsible for 29% of methane emissions worldwide. Even before it is burned, natural gas leaks from pipelines and other infrastructure, contributing to climate change. When natural gas is burned, it releases carbon dioxide and particulate matter, which contribute to global warming and local air pollution.
New York State’s electricity mix is heavily reliant on fossil fuels, with natural gas accounting for over 40% of the state’s electricity generation. This reliance on fossil fuels contributes to climate change and air pollution. To transition away from fossil fuels, New York State has set a goal of achieving 70% renewable energy by 2030.
Homeowners can play a role in reducing their carbon footprint and promoting clean energy adoption by installing rooftop solar panels and battery storage systems. Solar panels generate electricity from the sun, which is a clean and renewable source of energy. Battery storage systems can store excess solar energy for use at night or when the sun is not shining. By installing solar panels and battery storage systems, homeowners can reduce their reliance on fossil fuels and help to mitigate climate change.
Here are some additional ways that homeowners can contribute to the transition away from fossil fuels:
- Weatherize their homes to reduce the need for heating and cooling.
- Choose energy-efficient appliances and electronics.
- Walk, bike, or take public transportation instead of driving whenever possible.
- Support businesses that are committed to sustainability.
- Advocate for policies that promote clean energy and reduce greenhouse gas emissions.
By taking these steps, homeowners can help to create a clean energy future for New York State and the world.
Cons of Going Solar in New York State
In New York State, there are significant advantages to going solar, such as:
- Reduced electricity bills
- Increased home value
- Reduced reliance on fossil fuels
However, the decision to install solar panels is a significant one, so it’s essential to consider the potential drawbacks as well.
New York Has Less Sunshine
New York State, also known as the Empire State, faces unique challenges when it comes to solar energy generation due to its limited sunshine. With an average of less than 4.5 hours of peak sun hours per day, New York State receives significantly less sunlight than sunnier states such as Florida. This limited exposure to sunlight means that solar energy systems in New York State require more solar panels to produce the same amount of electricity as systems in sunnier regions.
In addition to the lack of sunlight, New York State also faces challenges from shading. Buildings in the city and trees upstate can cast shadows on solar panels, further reducing their effectiveness. This means that solar energy systems in New York State need to be carefully designed and sited in order to maximize sunlight exposure.
Despite the challenges, solar energy is still a worthwhile investment in New York State. The state has attractive solar incentives and a net metering policy that mitigate the cost disadvantage. For example, the sticker price (before incentives) of a 7.6 kW solar system in New York State is $36,740, while the same system costs $19,700 in Florida. However, after applying solar incentives, the cost of a solar system in New York State can be reduced to as low as $15,000.
The net metering policy in New York State also allows solar energy system owners to sell excess electricity back to the grid at retail rates. This can help to offset the cost of electricity and make solar energy even more affordable.
Challenges of Transporting Solar Panels and Batteries: Limited Portability Options
When considering a solar system for your home, it’s important to keep in mind several key considerations:
Portability: Solar systems are generally not portable, meaning you can’t easily move them from one location to another. If you plan on moving, you should consider this potential limitation before investing in a solar system, as moving may void your warranty.
Financial Considerations: While solar panels and battery storage can add value to your home, there’s no guarantee you’ll recoup the full cost of the system when you sell. It’s important to consider the long-term financial benefits, such as the potential savings on electricity bills, when making this decision. The longer you own the system, the more likely you are to recoup the investment.
Weather Considerations: New York experiences a wide range of extreme weather, including hurricanes, blizzards, hail, and tornadoes. While solar and battery storage can provide backup power during these events, they may not be helpful if you evacuate or your home is damaged. It’s important to check your homeowners insurance coverage carefully to ensure you have adequate protection for your solar system in case of damage.
Maintenance and Upkeep: Solar panels require minimal maintenance but may need occasional cleaning or repairs. It’s important to factor in these potential costs when considering the long-term viability of a solar system for your home.
Environmental Impact: Solar energy is a clean and renewable source of energy, making it an attractive option for homeowners who want to reduce their carbon footprint. By choosing solar, you can contribute to reducing greenhouse gas emissions and support a more sustainable future.
Cost Barriers of Solar Panels in New York
The high upfront cost of solar and battery systems is indeed a significant obstacle to their adoption, particularly in New York. Homeowners in the state need more solar panels to achieve the same level of energy production as those in sunnier regions due to the less favorable sunlight conditions. Even after factoring in state and federal incentives, the cost of a typical solar-only project can range from $10,000 to $20,000, making it financially challenging for many homeowners.
To address this challenge, zero-down solar loans have emerged as a potential solution by spreading out the cost over time and accelerating the realization of energy cost savings. However, obtaining these loans requires meeting specific lending criteria similar to mortgages and auto loans. A good credit score and a favorable debt-to-income ratio become crucial factors in securing financing.
In addition to the upfront cost, other factors contributing to the slow adoption of solar and battery systems include:
- Lack of awareness and understanding: Many homeowners may not be fully aware of the benefits and potential cost savings associated with solar energy systems. Misconceptions and a lack of knowledge can hinder the adoption of these technologies.
- Complexities in installation and maintenance: Installing solar panels and battery systems can involve complexities, especially for those unfamiliar with the technicalities. Dealing with permits, regulations, and choosing the right system can be challenging for homeowners.
- Limited access to financing: While zero-down solar loans can be helpful, they may not be available to all homeowners. Those with poor credit scores or high levels of debt may find it difficult to qualify for such loans.
- Aesthetics and property value concerns: Some homeowners may have concerns about the aesthetic impact of solar panels on their property. Additionally, there are misconceptions that installing solar panels can negatively affect property values, although studies have shown that solar panels can actually increase property values in many cases.
Tackling these challenges requires a multi-faceted approach. Governments, utilities, and industry stakeholders can work together to raise awareness, simplify installation processes, provide accessible financing options, and address misconceptions through education and outreach efforts. By overcoming these obstacles, the adoption of solar and battery systems can be accelerated, contributing to a cleaner and more sustainable energy future.
Solar Incentives in New York State
New York State offers some of the most attractive solar incentives in the country, significantly reducing the cost of going solar and increasing your return on investment.
These incentives include:
- NY-Sun Megawatt (MW) Block incentive
- NY State Solar Energy System Equipment Tax Credit
- Solar Electric Generating System Tax Abatement
- Home Solar Project Sales Tax Exemption
- Net metering
We will cover each of these incentives in detail, starting with the NY-Sun Megawatt Block Incentive.
The NY-Sun Megawatt Block Incentive
The NY-Sun Megawatt Block incentive is a solar incentive program offered by the New York State Energy Research and Development Authority (NYSERDA). It is designed to encourage the adoption of solar energy by reducing the upfront cost of solar PV systems.
How does the NY-Sun Megawatt Block incentive work?
The NY-Sun Megawatt Block incentive provides a per-watt rebate to solar installers for each solar PV system they install. The rebate amount varies depending on the location of the solar PV system and the size of the system.
What are the benefits of the NY-Sun Megawatt Block incentive?
The NY-Sun Megawatt Block incentive has several benefits, including:
- Reduced upfront cost: The incentive reduces the upfront cost of solar PV systems, making them more affordable for homeowners and businesses.
- Increased adoption of solar energy: The incentive is designed to encourage the adoption of solar energy by making it more affordable.
- Job creation: The incentive is expected to create jobs in the solar industry.
Who is eligible for the NY-Sun Megawatt Block incentive?
To be eligible for the NY-Sun Megawatt Block incentive, homeowners and businesses must meet the following criteria:
- The solar PV system must be located in New York State.
- The solar PV system must be installed by a NYSERDA-approved installer.
- The solar PV system must be interconnected to the electric grid.
How do I apply for the NY-Sun Megawatt Block incentive?
To apply for the NY-Sun Megawatt Block incentive, homeowners and businesses must submit an application to NYSERDA. The application is available on the NYSERDA website.
The NY-Sun Megawatt Block incentive is a valuable program that can help homeowners and businesses save money on the cost of solar PV systems. If you are considering installing a solar PV system, be sure to apply for the NY-Sun Megawatt Block incentive.
As of April 2023, the following were the solar incentive rates for each region:
| REGION | NY RESIDENTIAL SOLAR INCENTIVE RATE* | INCENTIVE FOR 7.6 KW SOLAR SYSTEM |
| Con Edison | $0.20/W | $1,520 |
| Upstate | $0.20/W | $1,520 |
| Long Island | Closed | None |
*Incentive rates as of October 2023.
Important information about the NYSERDA incentive:
- Maximum Incentive:The maximum incentive for a typical residential solar system is $8,750.
- Time-Limited Opportunity:The incentive is not permanent and has been gradually decreasing since its inception in 2014.
The Con Edison and Upstate regions are in their final incentive blocks, and the Long Island incentive ended in 2016.
While the NY-Sun Megawatt Block program is a great incentive, it pales in comparison to the financial benefits offered by the New York State and federal solar tax credits.
Federal and New York State Solar Tax Credits
Solar Tax Credits in New York State
There are two significant tax credits available for individuals who install solar energy systems in New York State:
- New York State Tax Credit: A 25% tax credit is offered by the state of New York for the cost of installing a solar energy system.
- Federal Tax Credit: In addition to the state tax credit, there is also a 30% federal tax credit available for the cost of installing a solar energy system.
Please note that this article does not constitute tax advice. If you have questions regarding solar tax credits, please consult with a licensed tax professional.
New York State Solar Tax Credit
The New York State Solar Energy System Equipment Tax Credit, also known as the NY State Solar Tax Credit, is an enticing financial incentive for homeowners and businesses who choose to install solar panel systems in New York State. It ranks among the most lucrative state-level solar tax credits in the United States.
The credit amount is calculated based on the installed cost of the solar energy system, which is the contract price after applying cash discounts and the New York State Energy Research and Development Authority (NYSERDA) incentive. The credit is worth either 25% of the installed cost or $5,000, whichever is less. This means that homeowners and businesses can potentially save a significant amount of money on their state taxes by installing solar panels.
To be eligible for the NY State Solar Tax Credit, the solar energy system must meet certain requirements. The system must be installed on residential or commercial property located in New York State. The system must be certified by the New York State Department of Public Service (DPS) and meet all applicable electrical and building codes. The system must also be interconnected with the electric grid and primarily used to generate electricity for the property it is installed on.
The NY State Solar Tax Credit is a valuable incentive that can help reduce the upfront cost of installing a solar energy system. Homeowners and businesses who are considering installing solar panels should take advantage of this credit to save money on their state taxes.
Here are some key points to remember about the NY State Solar Tax Credit:
- It is a tax credit, not a deduction, which means it directly reduces the amount of state taxes owed.
- The credit is available for both residential and commercial solar energy systems.
- The credit is worth either 25% of the installed cost or $5,000, whichever is less.
- To be eligible, the solar energy system must meet certain requirements, such as being certified by the NYS DPS and primarily used to generate electricity for the property it is installed on.
- Homeowners and businesses who are considering installing solar panels should take advantage of the NY State Solar Tax Credit to save money on their state taxes.
Here’s an example of how the tax credit would work for a real solar.com quote for a 7.6 kW solar system:
| 7.6 KW SOLAR SYSTEM | AMOUNT |
| Gross price | $36,740 |
| NYSERDA rebate | -$1,520 |
| Cash discount | -$6,336 |
| Installed price | $28,884 |
| NY state solar tax credit | -$5,000 |
| Net Price | $23,885 |
Since 25% of the installed price is more than $5,000, the tax credit is worth $5,000 for this customer.
In New York State, there are three important things to know about the solar tax credit:
- It’s a non-refundable credit, which means you can use it to reduce your tax liability. If you don’t have sufficient tax liability, you can roll it over for up to five years.
- The state tax credit is considered taxable income by the federal government and may need to be claimed on your federal taxes.
- It can be used in addition to the 30% federal solar tax credit.
Let’s see how these tax credits work together:
Non-Refundable Credit: This credit can be used to lower your tax liability, but if you don’t have enough tax liability, you can carry it forward for up to five years.
Federal Tax Impact: Keep in mind that the state tax credit is considered taxable income by the federal government and may need to be reported on your federal taxes.
Complementary to Federal Credit: The state tax credit can be used in addition to the 30% federal solar tax credit.
This means that you can save even more money on your solar installation by taking advantage of both the state and federal tax credits.
Here is an example of how the tax credits work together:
- Assume you have a solar installation that costs $20,000.
- You would be eligible for a $5,000 state tax credit and a $6,000 federal tax credit.
- The total amount of tax credits you would receive would be $11,000.
- This would reduce your tax liability by $11,000.
If you don’t have enough tax liability to use the entire amount of the tax credits in one year, you can carry the unused amount forward for up to five years.
The solar tax credits are a great way to save money on your solar installation. By taking advantage of both the state and federal tax credits, you can significantly reduce the cost of going solar.
Let’s explore how these tax credits work together in a practical example.
Federal Solar Tax Credit
The Residential Clean Energy Credit, which now accounts for 30% of the installed cost of a solar and/or battery system, was recently enhanced by the Inflation Reduction Act. This makes it the largest solar incentive available for most homeowners, providing significant financial benefits for those looking to make the switch to clean energy. It’s important to note that the credit is only available for systems installed after December 31, 2022, and the deadline to claim the credit is December 31, 2034.
Like New York State’s tax credit, the federal solar tax credit is a non-refundable tax credit that can be used to lower your federal tax responsibility. This means that while the credit won’t result in a check in the mail, it will directly reduce the amount of federal tax you owe. This makes it a valuable incentive for homeowners who are looking to reduce their tax burden while also investing in clean energy.
If you don’t have sufficient tax liability in the year that your solar system is installed, the credit can be carried over for up to five years. This provides flexibility and allows you to take advantage of the credit even if you don’t have a large tax liability in the current year.
To illustrate how the federal solar tax credit and the New York state solar tax credit interact, let’s consider a 7.6 kW solar system. With an installed cost of $20,000, the federal solar tax credit would provide a credit of $6,000 (30% * $20,000), while the New York state solar tax credit would provide a credit of $2,000 (25% * $8,000). This means that a homeowner who installs a 7.6 kW solar system in New York could receive a total of $8,000 in tax credits, significantly reducing the overall cost of the system.
These tax credits make solar energy a more affordable option for homeowners, allowing them to make a positive impact on the environment while also saving money on their energy bills and reducing their carbon footprint.
| 7.6 KW SOLAR SYSTEM | AMOUNT |
| Gross price | $36,740 |
| NYSERDA rebate | -$1,520 |
| Cash discount | -$6,336 |
| Contract price | $28,884 |
| NY State solar tax credit | -$5,000 |
| Federal solar tax credit | -$8,665 |
| Net price | $15,219 |
Through a combination of the New York State solar incentives and the federal solar tax credit, this customer has reduced the total cost of going solar by over $15,000.
New York State Solar Tax Exemptions and Abatements
In addition to the tax credits and incentives offered by the New York State Energy Research and Development Authority (NYSERDA), there are several other ways to maximize your solar savings. These include tax exemptions and abatements.
Tax Exemptions:
- Sales Tax Exemption:
In some states, the purchase of solar panels and related equipment is exempt from sales tax. This can result in significant savings, especially for larger systems.
- Property Tax Exemption:
Some states and municipalities offer property tax exemptions for solar installations. This means that the value of your solar system will not be included in your property tax assessment, potentially saving you hundreds or even thousands of dollars per year.
Tax Abatements:
- Solar Energy Abatement:
Some states and municipalities offer solar energy abatements, which reduce the amount of property taxes you owe for a specified period of time. This can be a valuable incentive for homeowners who are considering going solar.
- Renewable Energy Abatement:
Some states and municipalities offer renewable energy abatements, which reduce the amount of property taxes you owe for all renewable energy systems, including solar panels, wind turbines, and geothermal systems.
To determine if you are eligible for any of these tax exemptions or abatements, it is important to consult with a licensed tax professional. They can help you understand the specific requirements and ensure that you are taking advantage of all available incentives.
It is also important to note that tax laws and incentives can change, so it is a good idea to stay up-to-date on the latest developments. By doing so, you can maximize your solar savings and make the most of your investment in renewable energy.
New York State Solar Sales Tax Exemption
New York State’s sales tax exemption for residential solar systems is a significant incentive for homeowners considering adopting solar energy. This exemption can lead to substantial cost savings, making solar energy a more affordable option. It’s important to note that this exemption only applies to state sales tax, and local sales tax may still be applicable. However, certain local jurisdictions, such as New York City, also offer sales and use tax exemptions for solar systems, providing further incentives for homeowners considering solar energy.
The exemption is calculated based on the contract price of the solar system and the applicable state sales tax rate. For example, for a 7.6 kW system with a contract price of $28,884, the exemption translates to a savings of $1,155.36, assuming a 4% state sales tax rate. This savings can be significant, especially for larger systems.
The exemption is available to both homeowners and businesses that install solar systems on their property. To qualify for the exemption, the system must be installed on a residential property in New York State and must be used to generate electricity for the property. The exemption applies to the purchase of the solar system, as well as any installation costs.
In addition to the sales tax exemption, New York State also offers other incentives for solar energy, such as a net metering program and a solar renewable energy certificate (SREC) program. These incentives can further reduce the cost of solar energy and make it a more attractive option for homeowners and businesses.
The sales tax exemption for residential solar systems is a valuable incentive that can help homeowners and businesses save money on the cost of solar energy. This exemption, along with other incentives offered by New York State, makes solar energy a more affordable and attractive option for many people.
Property Tax Exemption for Solar Systems
In the state of New York, there is a specific law, known as Real Property Tax Law 487, which provides a significant incentive to property owners who install solar panels or other renewable energy systems. Under the provisions of this law, property owners are entitled to a 15-year exemption from property taxes on the increased value of their homes resulting from the installation of these eco-friendly systems.
It is important to emphasize that this exemption is not a blanket elimination of all property tax liabilities. Rather, it is limited to the additional value that the renewable energy system adds to the property. To illustrate this, consider a property originally valued at $400,000. If the installation of a solar system increases the property’s value by $35,000, then the exemption applies only to the $35,000 increase, and property taxes would continue to be due on the original $400,000 value.
It is worth noting that not all municipalities in New York State have opted into the provisions of Real Property Tax Law 487. Some municipalities have chosen to opt out and, therefore, property owners in those areas would not be eligible for this exemption. It is crucial for property owners interested in taking advantage of this incentive to verify the eligibility requirements and specific guidelines of their local tax code.
The Real Property Tax Law 487 is a valuable initiative that aims to encourage the adoption of renewable energy systems and promote sustainable practices. By offering a 15-year exemption on property taxes, the state of New York incentivizes homeowners to invest in solar panels and other renewable energy sources, thereby contributing to broader environmental goals and reducing the reliance on traditional fossil fuels.
NYC Real Property Tax Abatement Program
In New York City, a commendable real property tax abatement program supports the installation of grid-connected solar and battery systems. The program’s recent extension until 2034 is a testament to the city’s commitment to promoting sustainable energy practices. By offering financial incentives, the program aims to alleviate the burden of property taxes for homeowners and businesses, encouraging the adoption of clean energy solutions.
For solar energy systems installed and commissioned from 2024 onward, the New York City solar tax abatement program provides significant cost savings. The abatement, calculated as a percentage of the installed price after accounting for the New York State Energy Research and Development Authority (NYSERDA) incentive, offers relief over four years.
Let’s illustrate the calculation with an example. Consider a 7.6 kW solar system with a contract price of $28,884. The tax abatement would be determined as follows:
Tax Abatement = 7.5% x ($28,884 – NYSERDA Incentive) x 4 years
The net effect is a reduction in property taxes associated with the solar installation, making it more financially viable for property owners to embrace renewable energy.
The New York City solar tax abatement program serves as an effective tool to accelerate the adoption of solar energy within the city limits. By providing economic incentives, the program aligns with the city’s broader sustainability goals, promotes energy independence, and contributes to a cleaner and more resilient urban environment.
| YEAR | AMOUNT |
| Year 1 | $2,166.30 |
| Year 2 | $2,166.30 |
| Year 3 | $2,166.30 |
| Year 4 | $2,166.30 |
| Total property tax reduction | $8,665.20 |
The annual property tax liability imposes the maximum limit for the abatement, which is $62,500 per year.
Net Metering in New York State
In the state of New York, the adoption of residential solar energy is greatly facilitated by the favorable policy of net metering. Net metering allows homeowners with solar panel systems to receive credits for any excess solar energy they contribute to the electrical grid during daylight hours. These credits can then be used to offset the cost of using grid electricity at night or during the winter, when solar panel production may be reduced.
Net metering effectively makes solar energy a viable option for homeowners, despite the intermittent nature of solar power generation, unless they have battery storage systems. Here are some key points to elaborate on:
Financial Benefits:
- Net metering allows homeowners to save money on their electricity bills by offsetting the cost of grid electricity with the credits they receive for their excess solar energy production.
- The specific financial benefits vary depending on factors such as the size of the solar system, the amount of solar energy produced, and the electricity rates in the area. However, studies have shown that net metering can significantly reduce electricity costs for solar-powered homes.
Environmental Impact:
- Net metering promotes the adoption of clean and renewable energy sources, such as solar power, which reduces reliance on fossil fuels and associated greenhouse gas emissions.
- By incentivizing solar energy production, net metering helps combat climate change and contributes to a more sustainable future.
Grid Stability and Reliability:
- Net metering can contribute to grid stability and reliability by providing a decentralized source of electricity generation.
- During peak demand periods, solar energy can help alleviate stress on the grid and reduce the need for expensive peaker plants.
- Additionally, net metering can provide backup power during grid outages, enhancing the resilience of the electrical system.
Local Job Creation:
- The installation and maintenance of solar panel systems create local jobs, contributing to economic development and job growth in the renewable energy sector.
- Net metering policies can stimulate the local solar industry and support a skilled workforce.
Equity and Access:
- Net metering can promote energy equity by making solar energy more accessible to a broader range of homeowners.
- By offsetting electricity costs, net metering can reduce the financial barriers to adopting solar power, particularly for low-income households.
Overall, net metering is a valuable policy that supports the adoption of residential solar energy, providing financial benefits to homeowners, reducing environmental impact, enhancing grid stability, creating local jobs, and promoting energy equity. By recognizing the importance of net metering, policymakers can contribute to the widespread adoption of solar energy and the transition to a clean energy future.
Many states, such as New York, are adjusting their net metering policies to adapt to the rapidly evolving solar industry, which frequently results in rate increases for solar owners. New York is in the process of transitioning its net metering structure and currently offers two billing options to its solar owners.
Phase One plus CBC:
This transitional version of a standard net metering program enables solar owners to receive the full retail value for the electricity they feed into the grid. However, it incorporates a “Customer Benefit Contribution (CBC)” charge determined by the utility provider and the size of the system.
| UTILITY PROVIDER | 2023 CBC RATE ($/KW PER MONTH) | CHARGE PER MONTH FOR A 7.6 KW SYSTEM |
| Central Hudson | $1.18 | $8.97 |
| Con Edison | $1.09 | $8.28 |
| LIPA | $0.59 | $4.48 |
| National Grid | $1.18 | $8.97 |
| NYSEG | $0.70 | $5.32 |
| Orange and Rockland | $1.07 | $8.13 |
| RG&E | $0.84 | $6.38 |
Value of Distributed Energy Resources (VDER) or Value Stack —
The new solar billing structure aims to compensate solar owners for the value of excess solar power when exported to the grid. The value is determined by various factors, such as wholesale energy rates, environmental benefits, and the reduction in grid demand and the need for utility infrastructure upgrades.
However, VDER is more complex to understand and generally less favorable to solar owners. Therefore, it is advisable to go solar before the traditional net metering option is phased out completely. Acting sooner rather than later is the best way to be grandfathered into a favorable net metering policy.
Is going solar worth it in New York State?
In the Empire State, the decision to embrace solar energy is not only environmentally conscious but also financially prudent. With the confluence of high grid energy costs and a plethora of favorable state incentives, New York homeowners can reap significant long-term financial rewards by transitioning to solar.
Consider the case of a homeowner in Brooklyn. By investing in a 7.6 kW solar system, they could potentially save an impressive sum of over $45,000 on their electricity bills over two decades. This estimate is substantiated by a real quote obtained from solar.com, a reputable solar provider.
In addition to these substantial savings, the homeowner would be eligible for an $8,700 property tax abatement, potentially reducing their annual tax burden. Furthermore, the installation of a solar system can enhance a home’s value by up to 4%, providing an attractive return on investment. This increase in property value is not subject to taxation, offering a tax-free financial windfall.
Beyond the monetary benefits, transitioning to solar energy in New York State allows homeowners to make a positive contribution to the environment. By generating clean, renewable energy, they can reduce their carbon footprint and help mitigate climate change.
Given the compelling financial and environmental benefits, it is evident that transitioning to solar in New York State is a worthwhile investment. The time to act is now, as the combination of high grid energy costs and generous state incentives creates an unparalleled opportunity for homeowners to make the switch to solar.
To ensure a successful solar installation, homeowners in New York should take the following steps:
- Conduct thorough research to understand their energy needs and available solar solutions.
- Obtain multiple quotes from reputable solar installers to find the best value for their investment.
- Explore financing options, such as solar loans or leases, to make the transition to solar more affordable.
- Take advantage of available state incentives, such as the solar tax credit and net metering, to maximize their savings.
By following these steps, homeowners in New York State can harness the power of the sun to save money, enhance their property value, and contribute to a cleaner future.
New York State solar FAQs
What are the NY solar incentives?
New York offers a range of residential solar incentives to encourage homeowners to adopt clean energy solutions. These incentives include:
NY-Sun Megawatt Block program:
- This program provides financial incentives to homeowners who install solar panels on their properties.
- The program offers a fixed-rate payment for the electricity generated by the solar panels, which is higher than the retail rate for electricity.
- Homeowners can also receive a performance-based incentive, which is based on the amount of electricity generated by the solar panels.
A 25% state tax credit:
- Homeowners who install solar panels can claim a 25% tax credit on the cost of the system.
- The tax credit is applied to the state income tax and can be claimed for up to five years.
A 30% federal tax credit:
- Homeowners who install solar panels can also claim a 30% tax credit on the cost of the system.
- The federal tax credit is applied to the federal income tax and can be claimed for up to five years.
Sales and property tax exemptions:
- Homeowners who purchase solar panels are exempt from sales tax on the cost of the system.
- Additionally, some municipalities offer property tax exemptions for solar panels.
Property tax abatement (NYC only):
- Homeowners in New York City can apply for a property tax abatement for their solar panels.
- The abatement reduces the amount of property tax that homeowners owe on their homes.
A favorable net metering policy:
- Net metering is a billing mechanism that allows homeowners with solar panels to receive credit for the excess electricity that their panels generate.
- The credit is applied to the homeowner’s electric bill, and it can help to offset the cost of electricity.
What is the cost of solar panels for properties in New York State?
In Brooklyn, a solar system with a 7.6 kWh capacity costs $15,219 after applying state, federal, and marketplace incentives, according to a real binding quote presented to a solar.com customer. This translates to an electricity cost of 6.7 cents per kilowatt-hour, which is significantly lower compared to the 24.9 cents per kilowatt-hour electricity rate in New York City. This represents a savings of 73% on electricity costs, or $1,165 per year on average.
The cost of solar panels has come down significantly in recent years, making them a more affordable option for homeowners. In addition, state and federal incentives are available to help offset the cost of installation. As a result, solar panels are becoming an increasingly popular way to save money on energy costs and reduce environmental impact.
Here is a breakdown of the costs associated with a 7.6 kWh solar system in Brooklyn:
- Solar panels: $10,000
- Installation: $5,000
- State and federal incentives: -$2,219
- Total cost: $15,219
The cost of a solar system will vary depending on the size of the system and the location of the home. However, the savings on electricity costs can be significant. In New York City, the average homeowner can save over $1,000 per year on electricity costs by installing a solar system.
In addition to saving money, solar panels can also help to reduce environmental impact. Solar energy is a clean and renewable source of energy that does not produce greenhouse gases. By installing a solar system, homeowners can help to reduce their carbon footprint and make a positive impact on the environment.
What is the average lifespan of solar panels in New York City?
Modern solar panels come with an extended warranty period, typically ranging from 25 to 30 years. During this period, manufacturers guarantee a certain level of power generation, providing peace of mind to homeowners and businesses. However, it’s important to note that the lifespan of solar panels often exceeds the warranty duration, allowing for continued electricity production beyond the initial coverage period.
Unlike many products with a fixed expiration date, solar panels undergo a natural degradation process over time. This gradual decline in efficiency is an inherent characteristic of the technology. Premium solar panels are designed to withstand various weather conditions, such as rain, snow, and extreme temperatures, ensuring durability and longevity. Interestingly, in regions like New York State, rain and snow can even contribute to keeping solar panels clean and maintaining their optimal performance.
The extended lifespan of solar panels offers numerous benefits. Firstly, it allows homeowners and businesses to enjoy the financial rewards of solar energy generation for a longer period, potentially offsetting the initial investment costs. Secondly, it reduces the need for frequent replacements or upgrades, contributing to sustainability by minimizing waste and environmental impact.
Additionally, the durability of solar panels provides peace of mind. Homeowners can have confidence that their investment in solar energy will continue to yield benefits for decades to come. Furthermore, the longevity of solar panels aligns with the long-term nature of mortgages, making it a worthwhile investment for sustainable energy production.
Modern solar panels are designed to last, offering a lifespan that extends beyond the warranty period. This durability ensures continued electricity generation, financial savings, and peace of mind for homeowners and businesses committed to a sustainable future.
Does Installing Solar Panels Increase the Value of Homes in New York State?
The installation of solar panels on residential properties in New York State offers homeowners significant advantages. One of the most compelling benefits is the financial incentive related to property taxes. By leveraging a unique property tax exemption, homeowners can enjoy enhanced home values without incurring additional property tax burdens for a period of 15 years.
This tax exemption is a testament to the state’s commitment to promoting sustainable and renewable energy sources. By encouraging homeowners to adopt solar energy, New York State aims to reduce carbon emissions and transition towards a greener future.
The value-enhancing potential of solar panels is further supported by a study conducted by Zillow, a leading real estate marketplace. The study revealed that in New York City, homes equipped with solar panels commanded a premium price in the market. On average, homes with solar panels sold for approximately 5.4% more than comparable homes without solar panels in 2019.
This translates to a substantial increase of around $37,800 added to the average sales price of a home in New York City. The study’s findings underscore the growing demand for eco-friendly features among homebuyers and the willingness of the market to pay a premium for sustainable living.
For homeowners considering solar panel installation, the financial benefits extend beyond cost savings on energy bills. The increase in property value and the associated tax exemption make solar panels a financially sound investment. By embracing solar energy, homeowners can enhance the sustainability of their homes, contribute to environmental preservation, and reap the rewards of a higher property value in the long run.