Amplify Your 2024 Savings with New York (NY) Solar Tax Incentives
Introduction
With the radiant glow of the sun gracing the Empire State, New Yorkers are in for a fantastic chance to tap into the sun's power and reap significant savings courtesy of New York’s solar tax credits, incentives, and rewards. In this blog post, we will break down everything you need to know about New York's commitment to solar energy and how you can leverage these opportunities to not only contribute to a sustainable future but also enjoy financial benefits.
Understanding New York Solar Tax Incentives and Credits
The state of New York offers tax incentives and solar credits aimed at promoting the adoption of solar technologies. The following is a list of the major tax incentives and solar credits available to New Yorkers like yourself:
Solar Energy System Equipment Credit
The Solar Energy System Equipment Credit is a tax incentive that can be claimed by New Yorkers who have installed solar energy equipment in their New York based primary residences. It offers a tax credit equivalent to 25% of the overall installation cost of a solar energy system.
This means that if you installed a $20,000 solar electric system, your total installation costs will be reduced to $15,000 ($20,000- $5000(25% of 20,000) = $15,000).
The maximum amount of tax credit that you can receive under this incentive is $5000.If the amount of tax credit you are slated to receive is more than $5000, you are legally allowed to carry forward the excess credit to the subsequent tax year.
To claim the Solar Energy System Equipment Credit, complete Form IT-255 after reading all the instructions provided.
The enticing solar tax incentives that are offered by the Solar Energy System Equipment Credit make going solar a smart investment for both your wallet and the planet.
New York Real Property Tax Exemption
One of the main benefits of installing a solar energy system in your home is the increase in property value. An increase in the property value of your house typically means an increase in the amount of property taxes that you owe.
An increase in property tax liability is not a concern for New Yorkers who own homes that have solar energy systems installed. This is because they qualify for a 15-year real property tax exemption under Section 487 of the New York Real Property Tax Law.
This exemption pertains to the increase in the assessed value of residential properties with installed solar energy systems.
Based on the significant benefits of the New York Real Property Tax Exemption, it is clear that investing in solar technologies positions homeowners like yourself to enjoy lasting financial advantages. By leveraging this exemption, you will not only make an eco-friendly choice but also embark on a sound and rewarding investment in solar energy.
New York Net Metering Program
The state of New York supports a net metering initiative that enables owners of solar systems to earn credits on their utility bills for the surplus electricity generated and fed back into the grid. This means that on sunny days when your solar energy system produces more energy than your home needs, you store that excess energy for future use.
Net metering provides a financial incentive that will allow you to offset your electricity costs. This program makes solar energy an even more attractive investment, as it offers a way to see a return on your investment through ongoing savings on your electricity bills.
Understanding Other New York State Solar Incentives
Apart from solar tax incentives, the state of New York provides a host of other financial incentives to encourage residents to adopt solar energy through government agencies like the New York State Energy Research and Development Authority (NYSERDA).
NYSERDA offers a wide variety of tax incentives designed to support a solar powered future for the Empire State through its NY-Sun Solar program. The following is a list of the major initiatives that encompass the NY Sun Solar program and their respective incentives:
NY-Sun Megawatt Block (MW Block) program
The NY-Sun Megawatt Block (MW Block) program provides incentives to owners of both residential and nonresidential properties.
Rewards under this program are exclusively applicable to solar electric systems that meet the following eligible criteria:
Their system sizes should not exceed 25kW DC.
The installed residential solar electric system should not be estimated to supply more than 110% of the annual electric usage of your New York based home.
These solar electric systems must be newly installed and designed by contractors and builders who are members of this program.
The MW Block program divides New York into three regions—Con Edison, Upstate, and Long Island—each offering unique incentives, with the amount determined by the geographical location of eligible homes. The Long Island MW block incentive program has reached full capacity while the Con Edison and Upstate MW block incentive programs are still accepting new applicants.
Applications for incentives under this program made before December 31, 2030, will be accepted or until all the allocated funds are exhausted, whichever happens first.
With each passing day, the chance to claim the incredible incentives offered by the MW block is decreasing as its incentives are allocated on a first-come, first-served basis and diminish as more solar capacity is installed. Contact us today for a FREE CONSULTATION to secure your slice of massive solar savings before it is too late!
Affordable Solar Residential Incentive
Do you have a low - or moderate-income household? If so, then the Affordable Solar Residential Incentive is tailored for you.
This incentive is available to New York homeowners with an income of less than 80% of the median income in their residential area. It is aimed at ensuring that low-income New York residents have access to affordable solar power solutions.
Homeowners eligible for this program and whose primary residence is in the Upstate region of New York are entitled to receive $0.80 per Watt of power produced by solar electric systems installed in their homes.
Conversely, homeowners eligible for this program and whose primary residence is in the Long Island region of New York are entitled to receive $0.40 per Watt of power produced by solar electric systems installed in their homes.
To determine your eligibility for this program, you will have to fill out this Income Eligibility Application.
Energy Storage Program Incentive
The Energy Storage Program Incentive is an incentive eligible for New Yorkers with single family residential homes based in Long Island. To qualify for this incentive, you will have to pair your residential energy storage systems with solar energy systems installed under the NY-Sun Solar Initiative.
The Energy Storage Program Incentive is equal to $250 per kilowatt (kW) for each hour of power consumed by an energy storage system.
If you are eligible for this program and your installed solar energy system uses an energy storage system with a capacity of 16 kWh, then you will receive an incentive that amounts to $4000 ($250/kWh x 16 kWh = $4000).
The Energy Storage Program Incentive serves as a catalyst for solar adoption as it provides financial benefits that contribute to building a more sustainable and resilient solar energy infrastructure.
Federal Solar Tax Credit: Residential Clean Energy Credit.
In addition to the New York Solar Tax credits, you can also enjoy the massive savings that accompany federal tax incentives like the Residential clean energy credit. This is a tax incentive that New Yorkers who own homes with installed solar energy equipment can claim on their federal income taxes.
The amount of solar tax credit that NY homeowners receive under this tax credit is equal to 30% of all the labor and set up costs incurred during the installation of the solar energy equipment on their homes. This means that if the total costs of installing a solar electric system in your New York based home is $30,000, the total amount of federal solar tax credit you will receive will be $9000 (30% of $30,000 is $9000).
It is important to know that the financial benefits that you will enjoy under this tax incentive decrease over time. So, the earlier you invest in solar energy equipment, the higher the amount of federal solar tax credit you will enjoy.
Ready to unlock your solar savings? Contact us TODAY for a FREE CONSULTATION.
To learn more about how the Residential clean energy credit will boost your solar savings, check out this blog post .
Unlocking the Massive Savings of Solar Energy
Having explored the assortment of federal tax incentives and solar credits available to New York homeowners, it is time to dive into the tangible benefits awaiting New Yorkers who choose to embrace solar energy. Beyond the environmental advantages, the substantial financial rewards are truly remarkable as shown by the following example:
If you decided to invest in a solar energy system for your home, with an estimated installation cost of $25,000, you can claim a New York State Solar credit of up to 25% which amounts to $6250 (25% x $25,000 = $6250).
Since the New York Solar Tax Credit is capped at $5,000, you are allowed to carry over the remaining $1250 tax credit to 2025 and claim the maximum allowable credit of $5000 in your 2024 taxes.
The net cost after the application of the New York State Solar Tax Credit is now $20,000. ($25,000-$5000 = $20,000).
Once you factor in the Federal Residential Clean energy credit that offers a 30% credit ($20,000 x 30% = $6000) on the installation costs, the adjusted installation cost is reduced to $14,000 ($20,000-$6000 = $14,000).
Keep in mind that if you are eligible for the incentives provided by the NY-Sun Solar program, your installation costs will reduce much further as you will rack up more savings.
Furthermore, these tax savings extend beyond the initial installation. With programs like net metering in place, you will continue to witness reductions in your electricity bills as your solar energy systems generate energy, potentially even earning credits for excess energy sent back to the grid.
Conclusion
As a New Yorker, going solar is not just a commitment to environmental responsibility; it is a strategic financial move that reaps rewards for years to come. By seizing the opportunities presented by New York State solar tax credits, incentives, and benefits, you not only contribute to a cleaner environment but also enjoy substantial savings on your energy bills. The time to harness the power of the sun and illuminate a greener, more cost-effective future for your home and for New York is NOW.
To facilitate a seamless transition, Hifadhi Solar is committed to guiding you through the entire process of installing a solar energy system tailored to your needs. Connect with us TODAY to embark on your solar journey and transform your rooftop into a sustainable powerhouse that benefits both you and the environment!
Disclaimer: Hifadhi Solar does not provide tax or accounting advice. The information on solar tax credits and matters presented in this blog has been prepared for general educational purposes only. It does not constitute professional tax advice and should not be relied on to make decisions about your taxes or finances. You should consult a qualified tax advisor or accountant about how tax laws and incentives apply to your specific situation before making financial decisions related to solar installations or tax credits.