New York Solar Rebates and Incentives

How Much Can You Save on Solar in New York?

Key Details

• The Federal Residential Solar Tax Credit provides a 30% tax credit on home solar systems up to 2032.
• New York Property Tax Exemption provides an additional 15-year exemption from real property taxes for buildings
• NY-Sun Megawatt Block Program offers qualified homeowners up to $1,000 for every kW of solar electricity purchased and installed on their properties.

New York Energy Profile

As of February 2023, New York is ranked the 43rd sunniest state in the country, with 3,904 KJ/m2 of annual radiation.

The Empire State had an installed solar capacity of 4,259 Megawatts as of 2023 (MW), enough energy to power 711,327 households. As a result, New York State ranks 10th for total solar capacity installed.

New York Solar Tax and Incentives at a Glance

With 176 installations throughout the territory, New York generates 4.25% of its total energy from solar energy.

As of 2023, solar investments in New York are valued at over $9.4 billion, with more than $1.6 billion derived in 2022 alone.

This investment has produced over 10,524 employment opportunities. As of 2023, there are over 738 solar companies operating in New York, including 86 manufacturers and 239 installers/developers.

How Affordable is Solar Energy in New York?

As of 2023, the average retail price of electricity in New York was 16.11 cents per kilowatt-hour, while the average cost of solar per watt was $3.2.

As of March 2023, a typical 6000-watt (6kW) solar PV system costs $19,260 before the tax credit is applied. After obtaining the solar tax credit, the price of a 6-kW solar system dropped to $13,482. A homeowner can save $5,778 on a 6 kW solar installation with the federal solar tax credit.

According to the US Energy Information Administration (EIA), in 2020, New York's total energy usage was 166.4 million British Thermal Units (Btu). This placed the state 49th in the United States in terms of overall energy consumption per capita.

Broken down by end-use sector, residential and commercial sectors supplied 43.4 and 50.3 Million Btu, respectively. As a consequence, New York ranks 47th (residential) and 31st (commercial) among US states in total energy consumption per capita.

The overall energy consumption per capita in the industrial sector was 17.7 Btu, placing it 49th among US states. In comparison, the transportation sector's total energy per capita was 45.1 Btu, ranking 50th among US states.

Federal Solar Tax Credit in New York

The Federal residential solar energy credit (also known as Investment Tax Credit (ITC)) allows New York taxpayers to deduct a percentage of the cost of a solar PV system when claiming federal income tax. As of 2023, the solar tax benefit is currently available to homeowners until 2034 in some capacity

Note: The solar PV system must be fully set up by the end of the tax year.

What You Need to Know about the Federal Solar Tax Credit in New York

The ITC has the following schedule:

• The energy tax credit remains at 30% of the system's expense from 2016 to 2019.
• Owners of new domestic and commercial solar systems were able to deduct 26% of the system's cost from their federal income taxes in 2020–2021.
• New home solar system users will be able to deduct 30% of the system's cost from their taxes between 2022 and 2032. Up until 2025, comhttps://home.treasury.gov/mercial solar installations will also be eligible for the 30% solar tax credit. The US Department of Treasury will then make the final decision regarding whether to expand the ITC to commercial systems.
• New home solar system owners will be able to deduct 26% of the costs associated with installing the system from their taxes starting in 2023.
• Owners of solar energy systems for new homes will be able to deduct 22% of the system's construction costs from their taxes starting in 2034.
• Residential solar energy systems will no longer be eligible for government credits as of 2035.

The Energy Policy Act of 2005 included the creation of the ITC. The program was supposed to conclude at the close of 2007. However, Congress postponed its expiration date because of its widespread acceptance.

The most recent increase under the Inflation Reduction Act took place in August 2022. The Act added ten more years to the government 30% solar tax credit.

How Does the Federal Solar Tax Credit Work?

As long as the taxpayer owns the solar energy equipment, they may claim the solar investment tax credit. For as long as the credit is still available, you can "carry over" any unused credit amount into subsequent years.

You can do this if you don't have enough tax debt in one year to qualify for the entire credit. As of 2023, unused credit balances for residential energy devices may be carried over until 2034.

You won't qualify for the tax refund if you sign a lease or power purchase agreement (PPA) with a solar installer because you won't own the system. Finally, it's important to note that people from all income levels are eligible for the ITC program.

Eligibility

If you're uncertain if the ITC applies to you and your property, take into account the following conditions:

• Installed between January 1, 2006, and December 31, 2034, your PV solar system is required.
• Your solar PV system has to be set up at your main or alternate residence in the United States.
• The energy generated for an off-site community solar project is applied to and shouldn't be more than your home's total electricity consumption. If a taxpayer purchases a part of a community solar installation, they may submit an application to the IRS for a section 25D tax credit.
• The solar Photovoltaic system is yours because you paid cash for it or borrowed money to pay for it. You didn't enact a contract or a PPA.
• You just installed or are just starting to use your solar PV setup. However, you are only eligible to receive credit for the original installation of the solar equipment. For instance, if you bought a house with solar panels already installed, you would not be eligible for financing.

What’s Covered by the Federal Solar Tax Credit?

Costs associated with the following green energy categories are eligible for the tax credit:

• A photovoltaic panel or cell, such as one used to power an attic fan, but not the fan itself.
• Contractor labor costs for site preparation, assembly, or original installation, as well as developer fees, inspection fees, and permit costs.
• Wiring, converters, and attaching hardware are all examples of equipment.
• Equipment for storing energy with a volume of 3 kWh or more. After the end of 2022, this will apply to any new hardware installations. Even if the battery is installed in a separate tax year than the solar array, the whole thing still qualifies. Energy storage systems are still subject to the installation date requirements.
• Costs that qualify for sales tax.

How do other incentives received affect the federal tax credit?

Rebate From Electric Utility to Install Solar Systems

Subsidies given by your utility to you for the installation of a solar PV system are generally exempt from federal income taxes. This is because the utility rebate for solar installation must be deducted from the total cost of the system before any tax benefit can be determined.

Payment for Renewable Energy Certificates

It is possible that any payments you receive from your utility or another buyer (up front or over time) in exchange for renewable energy certificates or other environmental attributes of the electricity you produce will be treated as taxable income. Your taxable revenue will go up due to the payment. However, the federal solar tax credit will remain unchanged.

State Government Rebate

Federal tax credits are not reduced by state government rebates, unlike utility rebates. If you built a solar photovoltaic system in 2022 and paid $18,000 for it, plus received a one-time $1,000 rebate from your state government, your federal tax credit would be calculated as follows:

$18,000 x 0.30 = $5,400

State Tax Credit

Federal solar PV tax credits are not reduced by the New York tax credit for solar panels, and vice versa. However, since you are no longer required to pay state income tax, your federal taxable income may be greater after receiving a state tax credit.

Claiming Federal Solar Tax Credit for An Off-Site Community Solar Program

Your eligibility to claim the federal tax credit is significantly affected by your unique conditions. When it comes to the residential federal solar tax credit, the IRS says in Questions 25 and 26 of its Q&A on Tax Credits that taxpayers may still be qualified even if their solar panels are located elsewhere than directly on their home.

However, there are numerous approaches to designing community solar initiatives. In some cases, it may be difficult to claim the tax credit even if you are eligible for it due to other tax rules.

Establishing a "special purpose entity," is one example of a possible structure. In this scenario, locals band together to form a business that oversees the neighborhood solar installation and provides the necessary funding.

If all your participation consists of issuing a check, you won't be able to claim the credit for your efforts in the community solar project. This is because your contributions to the project's management are inconsistent and insufficient.

That's because you're what they call a "passive investor." An investment tax refund can only be used to reduce passive income tax obligations, per IRS rules. Earnings from businesses or rentals in which the person has no material stake are excluded. As a result, a lot of residents won't be able to put away money for the credit.

How do I claim the Federal Solar Tax Credit in New York?

Please proceed to complete Form 1040 in the usual fashion. Section 3 line 5 of Form 1040 should be transferred to Form 5695.

Step 1: Determine how much of a solar tax refund you will receive

• On line 1 of Form 5695, enter the total sum you spent on your solar energy system. Everything necessary to get your new solar system up and running is included in this price.

Step 2: Roll over any tax credits that were not used in the prior year

• Use Line 12 to report any unused solar tax credits from previous years.
• Proceed to Line 13 if this is your first time submitting an ITC application.
• Connect the dots between lines 6b, 11 and 12 on line 13.

Step 3: Check for any limitations on your tax credit

• Line 14 – You can find the spreadsheet mentioned above for this section on the top of page 4 of the 5695 guidelines.
• Total tax due should be entered in Line 1 of the spreadsheet.
• Additional tax credits and changes can be entered on Line 2 of the worksheet.
• Subtract Line 2 from Line 1 on Line 3 of the worksheet to get your credit cap.

Step 4: You must calculate how much, if any, of your tax refund can be rolled over to your next tax return

• It's time to go back to Form 5695.
• On spreadsheet, line 14, type in the sum from line 3.
• Substitute line 15 with the shorter of lines 13 and 14. (it depends on what your total tax bill is vs. your total tax credits).
• Finding out if a credit can be rolled over to the following year requires calculating the difference between lines 15 and 13, which is entered on line 16.

Step 5: Incorporate the Form 5695 sum into your Form 1040 tax owed

• You can claim a tax refund for using solar energy by filling out Section C of Form 1040 after you've already determined the amount you're eligible to receive.
• Line 5 of Schedule 3 requires the sum from Line 15 of Form 5695.
• Line 8 of Plan 3 should be filled out in full.
• Line 20 of Form 1040 should be updated with the total from line 8 of Appendix 3.

Solar energy system owners can now use Form 1040 to collect their tax credits.

Federal Solar Tax Credits for Businesses

There are two alternative tax credits for companies that acquire solar energy systems:

The investment tax credit (ITC) is a tax credit that reduces a taxpayer's federal income tax liability by a portion of the expense of a photovoltaic system installed during the tax year.

The production tax credit (PTC) is a per-kilowatt-hour (kWh) tax credit for the first ten years of a system's operation for electricity generated by solar and other qualifying technologies. It decreases federal income tax liability and is annually adjusted for inflation.

Generally speaking, project owners cannot receive both the ITC and PTC for the same building. Depending on additional IRS guidance, co-located systems, such as solar and storage, may be eligible for various tax credits.

Other forms of renewable energy and storage technologies are also eligible for the ITC. However, those technologies fall outside the scope of this article.

Solar systems placed in service in 2022 or later and beginning construction before 2033 are eligible for a 30% ITC or 2.6 /kWh PTC if they satisfy the Treasury Department's labor requirements and are less than 1 megawatt (MW) in size.

What projects qualify for the ITC or PTC?

To be eligible for the business ITC or PTC, the solar system must meet the following criteria:

• Situated in the United States or one of its regions
• Use only new or recently used equipment.
• Not leased to a tax-exempt entity (e.g., a school), though tax-exempt entities are qualified for the ITC as a direct payment.

Solar Energy System Equipment Credit

Section 606(g-1) of the New York Tax Law establishes the solar energy system equipment credit. Certain solar energy system component expenses are eligible for the credit. The solar energy device must use solar radiation to generate heat, cold, hot water, or electricity for residential use to be eligible for the credit.

Installation and use of the equipment are required at your primary residence in New York State. For the purposes of the New York tax credit for solar panels, every piece of solar energy system hardware attached to a single net meter is regarded as a component of the same solar energy system.

Before you can be eligible for the credit, you must either sign a net energy metering contract with your electric company or abide by its net energy metering timetable if the solar energy system equipment generates electricity.

The transmission and distribution facility of the electric company must also be connected to the finished solar energy system equipment. There may also be additional restrictions and conditions imposed by the electric provider.

Amount of Credit

The maximum for the New York tax credit for solar panels you can receive is $5,000. This is equivalent to 25% of your qualifying expenditures for solar energy system equipment.

Costs associated with installing a qualified solar energy system can be allocated to individual units in a condominium or cooperative housing company. The cooperative housing company or condo owners' association should send this data to each tenant-shareholder or condo owner.

After the 15th year of a power purchase deal or lease for solar energy system equipment, no additional credit will be given.

If your tax liability is less than your credit, you will receive a reimbursement for the difference. But if your refund is larger than your tax bill, you can save it for up to five more years.

Form IT-255 and its accompanying instructions are required in order to receive the solar energy system equipment credit. The documents are hosted on the state's Solar NY-SUN website.

Net Energy Metering in New York

Net metering, also known as net energy metering or NEM, is a utility rate program that mandates your electric company to buy the excess solar energy generated by your solar panels at the full retail rate.

In 2017, the New York Public Service Commission announced the transition to a new method for compensating excess solar energy. This is the Value of Distributed Energy Resources (VDER) approach.

Value of Distributed Energy Resources (VDER)

In the spring of 2017, the New York State Public Service Commission (PSC) approved VDER. VDER was adopted with the intention of rewarding the production of renewable energy more accurately for its environmental and electrical grid gains. In the autumn of 2017, the first phase of VDER implementation was initiated. This phase only involves solar installations of a commercial or industrial scope.

VDER applies to anyone generating distributed energy (such as solar, hydro, or wind energy) in a Public Service Commission-regulated service area. Notably, this excludes Long Island Public Service Electric and Gas customers (PSEG LI). This is due to the fact that they are governed by their own regulatory body, the Long Island Power Authority (LIPA). However, LIPA separately approved their own VDER mechanism to compensate solar power generators on Long Island in a similar fashion.

The PSC has permitted the creation of transition programs to help ease into VDER. This is to prevent any negative effects of forcing the solar industry to switch from net metering to a totally different rate structure. Presently, homeowners have the option of enrolling in the VDER program or continuing to use the existing transitional net metering program, known as "Phase One plus CBC".

How you are compensated for excess solar energy is one of the main distinctions between VDER and New York's net metering policy. When using traditional net metering, you get volumetric credits for any extra energy you export to the grid.

This implies that if you give the grid 10 kilowatt-hours (kWh), you will receive a credit of 10 kWh to use later. With VDER you'll get a financial credit that you can apply to subsequent billing periods. The Value Stack Tariff you are charged is a variable rate. This rate largely relies on when and where the electricity is being sent.

How does the Value Stack Tariff work?

The Value Stack Tariff for a solar panel system is determined by the following five primary factors:

1. Locational-based marginal pricing (LBMP)
2. Capacity (ICAP)
3. Environmental value (E)
4. Demand reduction value (DRV)
5. Locational adders (LSRV)

Locational-Based Marginal Pricing (LBMP)

The wholesale cost of electricity is known as LBMP. Your electrical load zone, demand, and fuel costs all play a role in it. As a result, depending on when you transmit solar energy to the grid, this element of the Value Stack Tariff varies.

Capacity (ICAP)

This is similar to the credit you would receive under net metering. The ICAP component of your Value Stack Tariff is a value in energy pricing that guarantees that there is enough electricity supply from generators to meet peak demands. You pay electricity delivery rates on your existing electricity bill in addition to ICAP pricing. You are still given credit for this number under VDER. This component fluctuates, though not as regularly as the LBMP.

Environmental Value (E)

The Value Stack Tariff's E component compensates you for the environmental advantages that solar energy and other distributed generation sources offer. This is usually measured by the cost of a state's renewable energy certificate (REC) per kWh. This equates to roughly two to three cents per kWh of solar electricity supplied to the grid in 2018.

When your system is operational, the value you receive for the E component of the price is determined and fixed for 25 years.

Demand Reduction Value (DRV)

The amount by which your system lowers the peak demand on your power grid determines the DRV compensation factor. To put it another way, if you export solar electricity to the grid when demand is low, you'll have a smaller DRV value than if you supply the grid with solar electricity when distribution demand is very high.

Locational Adders (LSRV)

Not all solar power generators under VDER are eligible for the locational system relief value (LSRV) component of a Value Stack Tariff. Instead, this is an adder, or bonus, that the state offers if you put solar in an area with a lot of congestion for electricity distribution. An example of this is when the grid's transmission or distribution can't support all the loads required when the demand for energy is at its peak. Such an area is said to have electricity congestion. Utility firms offer maps showing the locations of these congestion zones so you can see if your area qualifies. For the first ten years of the system's existence, the adder is compensated.

How Does VDER Affect You?

The initial segment of VDER has begun. However, you are still eligible for net metering if you implement a home or small commercial system (though you can choose to opt into VDER). If you install solar panels before the state implements

VDER for all residential installations, net metering will be grandfathered in for 20 years. Alternatively, if you installed solar panels prior to the March 17, 2017 approval of VDER, you will continue to receive net metering benefits for the duration of your solar panel system.

One of the advantages of net metering credits over VDER compensation is that you are guaranteed a one-for-one kWh credit on your electric bill. Given the numerous variables involved in the Value Stack Tariff's calculation, it is more difficult to estimate the value of energy for which you will be compensated.

Due to these factors, the compensation of a net metering credit will typically be greater than the Value Stack Tariff. However, if you are eligible for the LSRV component of the tariff, you may receive a greater financial benefit from VDER than from net metering.

Due to the complexity of the Value Stack Tariff and the waiting period before the residential portion is implemented, it is extremely difficult to calculate an accurate projected tariff rate. If you are interested in calculating the expected value of a solar project, the New York State Energy Research and Development Authority (NYSERDA) offers a free Value Stack Tariff calculator on its website. This tool is the most effective method to estimate the potential savings on your future electricity bill.

How New York’s Net Metering Program Works

As of 2023, the net metering program in New York is standard net metering. The essence of net metering is as follows: solar panels are installed on a home's roof, and any energy generated is initially consumed by the home.

If your solar array produces more power than your home requires at the time, the excess electricity is sent to the grid. Afterwards, you receive a kilowatt-hour (kWh) credit on your electricity account to offset kilowatt-hours you will use from the grid in the future.

For instance, if your residence consumed 100 kWh from the utility and your solar system exported 25 kWh of excess solar energy to the grid, you would only be billed for 75 kWh at the end of the month.

Customer Benefit Contribution Charge

The manner in which energy is credited and tallied is consistent with the definition of net metering. However, New Yorkers who install photovoltaic systems after January 1, 2022 must pay a new monthly charge. This is known as the Customer Benefit Contribution (CBC) charge.

The value of the charge depends on the magnitude of your solar system and your utility provider. The table below details the CBC tariffs for solar homeowners.

2022 CBC rates

If you are a customer of Central Hudson and install a 7 kW solar system, your monthly CBC charge would be $8.61. Approximately $103 per year.

Term Length

After January 1, 2022, homeowners who have already installed solar panels can continue to take part in the current net metering scheme for another 20 years. After the initial 20 years, you will be subject to the standard solar billing rates in force at the time.

Electricity Rates

You can pick an electricity rate plan and stick with it for the full 20-year term if you like.

For instance, National Grid provides standard, Time of Use, and standby rates to its clients. If better rates become accessible in the future, you can also change your current plan.

By opting into the standard term offered by their utility, most solar homeowners will see the greatest reductions in their monthly energy costs.

Credit Rollover

Credits accrued through net metering will carry over to the following month's payment. Any remaining credits at the conclusion of the calendar year will be carried over to the following year's billing cycle.

Any unused net metering credits, however, will be lost forever after the 20-year period ends.

Difference Between Net Metering and Remote Net Metering

New York started using remote net metering in 2011. The method made it possible to distribute renewable energy produced by one system among various utility accounts. The energy generated by a designated "host" system in one location can be utilized by farms and non-residential customers under this scheme on their "satellite" accounts in other locations.

How to Enroll for Net Energy metering in New York

Identify whether or not net metering is an option for you

If you want to know if net metering is an option in your region, you should get in touch with your utility company. Some electricity companies limit the amount of solar energy they'll accept into the grid. This emphasizes the importance of double-checking before taking any kind of action. You also need to make sure that the net metering rules for solar panels are followed. Among these is making sure your home has the appropriate amenities and measurements.

Get in touch with solar system company

Find a solar panel installation firm after you've verified your net metering eligibility. You can count on their help to get your net metering system up and running. Further details on local regulations and processes will also be made available to you.

Net meter installation is recommended

To enable net metering, a net meter—a distinct type of energy meter—must be set up. It measures the energy your solar cells generate as well as the energy your home or business uses. It keeps an eye on the discrepancy and sends any extra electricity back into the grid.

A net metering deal should be signed

You will need to sign a net metering agreement with your utility company after having a net meter installed. According to the provisions of this agreement, any excess energy produced by your system will be credited to your account and used to offset future electricity bills.

Monitor your energy production and use closely

After implementing net metering, it is essential to monitor energy usage and production to guarantee optimal performance. The net meter measures both the electricity you generate from solar panels and the electricity you use in your house or business. It will be easy to keep track of how far you've come in terms of reducing your electricity bill and spotting any issue that may arise.

New York Property Tax Exemption

New York's Real Property Tax Law 487 grants a 15-year real property tax exemption for buildings with sustainable energy systems, such as solar electric systems. Only the value that a solar electric system contributes to the property's overall value is covered by this law.

It does not imply that property owners with a renewable energy system implemented are exempt from paying any property taxes. Even if a municipal government doesn't choose to withdraw, payment-in-lieu-of-taxes (PILOT) agreements may still provide financial advantages.

Authorization for Exemption

Real property that complies with the requirements set forth by the NYSERDA is exempt from taxes under Real Property Tax Law Section 487, but not from special ad valorem levies or special assessments:

• Solar or wind energy system
• Farm waste energy system
• Micro-hydroelectric energy system
• Fuel cell electric generating system
• Micro-combined heat and power generating equipment system
• Electric energy storage equipment and electric energy storage
• system
• Fuel-flexible linear generator electric generating system

A solar, wind, or farm waste energy plant must be built before July 1, 1988, or after January 1, 1991, and before January 1, 2025. Other eligible energy sources must be built between January 1, 2018, and January 1, 2025.

School districts (other than those in New York City, Buffalo, Rochester, Syracuse, and Yonkers) may pass a resolution or a local law stating that:

• No solar or wind exemption or farm waste energy system exemption will apply within its jurisdiction for systems constructed after January 1, 1991, or the date of such local law or resolution, whichever is later; or
• No solar or wind exemption or farm waste energy system exemption will apply within its jurisdiction for systems constructed before January 1, 1991, or the date of such local law or resolution.

No eligible energy system exemption will apply within its jurisdiction for systems built on or after January 1, 2018, or the date of such local law or resolution.

Timeframe and Calculation of Exemption

The exemption will be given for 15 years. It will be equivalent to the increase in the property's assessed value attributed to the addition of the energy system. When a system or its components are also part of a building's structure, the increase in value that is exempt from taxation is equal to the assessed value that can be attributed to the system or components multiplied by the proportion of the system's or component's incremental costs to the system's or component's total cost.

The cost of an energy system or component that is part of a building structure is said to have increased incrementally above the cost of similar conventional construction to allow its use as an energy system or component.

Fill out Form RP 487 from the New York State Department of Taxation and Finance to apply for the property tax exemption. It is advised that you complete this form with the help of your local property assessor. The worth of the solar installation will be included in your property tax assessment without the exemption in some municipalities and school districts that have chosen to forgo the exemption. To find out if your town has chosen to opt-out, you can contact your local assessor's office or consult the online list of municipalities that have chosen to opt-out.

New York City Real Property Tax Abatement Program

New York State passed a law in August 2008 providing a property tax abatement for investments in photovoltaic (PV) systems on structures in towns with a population of 1 million or more. This stipulation restricts the tax break's applicability to New York City-based setups only. All structures outside of those used for utilities are considered eligible properties.

The initial deadline for eligible systems to be in operation was December 31, 2012. However, modifications have prolonged the program's runtime multiple times. In September 2016, Senate Bill S7110 was signed into law, effectively extending the tax exemption until 2019. Assembly Bill 10410 of 2018 expanded the tax break to include energy storage. The deadline for participation in the program has currently been moved to March 15, 2024.

A portion of the costs involved in installing a PV system on a qualified building can be deducted from the real estate tax bill thanks to the abatement. It was possible to receive a yearly 8.75% abatement for four years on qualifying expenditures for systems put into operation between August 5, 2008 (the effective date) and December 31, 2010.

It was also feasible to get a 5% annual abatement for 4 years on qualifying costs for systems that were put into operation between January 1, 2011 and December 31, 2012.

Abatements of 2.5% of eligible expenditures per year for 4 years were available for systems put into operation between January 1, 2013 and December 31, 2013. All eligible expenditures on systems put into operation between January 1, 2014 and December 31, 2018 were eligible for a 5% abatement for a period of four years.

Accordingly, the overall property tax benefit can be as high as 35%, 20%, or 10% of the cost of the installed system.

In any given year, real estate tax abatements cannot exceed $62,500, whichever is less. Any remaining funds from one year cannot be transferred to the following year. All costs reasonably attributed to the planning, construction, and installation are eligible. Ineligible are any costs paid for with a federal, state, or municipal grant.

These also include any interest or finance service charges applied to those funds. Federal, state, or municipal tax credits, abatements, exemptions, or rebates do not decrease the amount of eligible expenditures.

New York's Department of Finance works with the Buildings Department to oversee the abatement initiative. In order to receive a tax credit in the same year that an abatement application is filed, an applicant must apply no later than March 15th. Requests received after that date will be considered for the subsequent fiscal year's tax liability.

It's worth noting that a building owner's eligibility for New York's real property tax exemption on the value contributed by solar, wind, and farm-based biogas energy systems will not be affected by their use of the abatement.

NY-SUN: What you Need to Know

The New York State Energy Research and Development Association (NYSERDA) established the NY-SUN Program in 2012 as a component of the Reforming the Energy Vision (REV) policy initiative. The program aims to make photovoltaic solar and energy storage projects cheaper and more accessible to residential and non-residential customers throughout New York State.

New York State Energy Research and Development Authority (NYSERDA), Long Island Power Authority (LIPA), PSEG Long Island, and the New York Power Authority (NYPA) all collaborated to create and develop NY-Sun. This will facilitate a smooth, well-supported expansion of solar energy and the inevitable move toward a solar industry that can support itself.

For residents of New York, NY-Sun makes going solar simpler and more affordable. The program provides rebates and funding sources to make buying and installing solar at home more affordable.

To reduce the cost of going solar for New Yorkers, NY-Sun directly collaborates with solar developers and contractors. Different incentives are offered throughout the State and are given directly to your chosen contractor. Work with a participating contractor that has received approval from NYSERDA to learn what incentives you may be eligible for.

Through Affordable Solar, the program also provides some homeowners with additional incentives. As a result, households receiving less than 80% of the area median income receive more money.

Like other NY-Sun incentives, Affordable Solar operates similarly. The difference is that you must complete an Incentive Eligibility Application and make some minor, inexpensive energy efficiency improvements to your home. Either you or your contractor can complete and submit the application on your own.

What are the incentives available through the NY-SUN Program?

NY-SUN is made up of several distinct incentive schemes. These programs are discussed below:

Affordable Solar

Additional benefits are offered through the program for families with lower and middle incomes. An applicant's family income must be at or below 80% of the State Median Income (SMI) or Area Median Income (AMI), whichever is higher.

Eligible homes in the Con Edison and Upstate Regions earn $0.80/W up to an installed capacity of 10kW.

The Affordable Solar incentive currently offers $0.40/W in the Long Island Region. However, this incentive is no longer available. All domestic projects with a capacity greater than 10 kW are eligible for the maximum available subsidy.

Also, unlike the residential incentive, which decreases as more projects become operational, the Affordable Solar incentive remains constant at its present level.

Multifamily Affordable Housing Adder

Other than the standard residential construction incentives, non-residential initiatives that benefit affordable multifamily housing developments can receive even more funding.

An eligible project will receive an extra $0.30/W incentive for the first 50kW installed. This is in addition to the regular nonresidential incentive. The relevant nonresidential base incentive will be paid out for projects with a capacity greater than 50kW.

Incentive Payment

Funds for rebates on approved systems are limited. Therefore, contractors reserve them on a first-come, first-served premise for customers. Contractors have a responsibility to inform and help their clients before beginning work on a PV system.

Part of that assistance is ensuring people know about and can take advantage of opportunities to increase energy efficiency. While having energy-saving measures knowledge is encouraged, it is not required to join the program.

After the PV system is linked to the utility grid, the contractor is eligible to receive incentives. The incentive can be paid out in two installments based on installation milestones for small commercial ventures.

Seventy-five percent of the overall incentive amount approved by NYSERDA is included in the initial incentive payment. This is disbursed once a client has received all parts of a system.

The remaining 25% is included in the second installment of the incentive payout. After a PV system has been connected to the utility grid and examined by NYSERDA or its representatives, this percentage is released.

NY-SUN System Eligibility

The scheme allows for solar PV systems up to 750 kW in commercial settings and 25 kW in homes (7.5MW in Con Ed). Eligible contractors are the only ones who can receive incentives.

These incentives must be passed on to the customers in full. Residential PV systems cannot exceed 110% of the demonstrated energy demand for the site. They must be sized to satisfy the site's energy requirements (local load or demand). It's important to consider this alongside any other electrical power generation systems you have. The incentive level will decrease if there is a risk of a 20% drop in production or more.

NY-SUN Incentive Payment

Funds for rebates on approved systems are limited. Therefore, contractors reserve them on a first-come, first-served premise for customers. Contractors have a responsibility to inform and help their clients before beginning work on a PV system.

Part of that assistance is ensuring people know about and can take advantage of opportunities to increase energy efficiency. While having energy-saving measures knowledge is encouraged, it is not required to join the program.

After the PV system is linked to the utility grid, the contractor is eligible to receive incentives. The incentive can be paid out in two installments based on installation milestones for small commercial ventures. Seventy-five percent of the overall incentive amount approved by NYSERDA is included in the initial incentive payment.

This is disbursed once a client has received all parts of a system. The remaining 25% is included in the second installment of the incentive payout. After a PV system has been connected to the utility grid and examined by NYSERDA or its representatives, this percentage is released.

NY-SUN’s Conditions for Builders and Contractors

The following criteria are used to determine and maintain contractor/builder eligibility: agreement to all program terms and conditions, training, installation experience, history with utility interconnections, and general performance.

Monitoring, customer references, customer satisfaction, and a dedication to obtaining certification through a national certification program are additional considerations. PV installers can get accredited training through NYSERDA.

On the website for Renewable Energy Training run by NYSERDA, training options are listed. To be eligible for the program, all contractors must hold credentials from Underwriters Laboratories (UL), the International Brotherhood of Electrical Workers (IBEW), or the North American Board of Certified Energy Practitioners (NABCEP).

NY-SUN Megawatt Block Incentive Structure

The NY-Sun Megawatt Block Program is the most popular solar incentive in New York. Included are rebates for individual homeowners determined by the size of their solar panels, incentives for businesses, and multipliers for solar energy initiatives in communities.

Homeowners can make thousands of dollars through the Megawatt Block program, which can be used to subsidize the initial investment in solar panels. This is a major factor why installing solar panels in New York is money well spent.

Rebates for the Megawatt Block are a component of the state's NY-Sun program. The New York State Energy Research and Development Authority (NYSERDA) created NY-Sun to increase the availability of renewable electricity in the state. NY-Sun does more than just offer financial incentives. It also provides local governments with resources for funding and education on projects and for achieving program goals.

To qualify for the residential incentives, a participating NY-Sun contractor must construct the solar panel system, and it cannot be larger than 25 kilowatts (kW).

Currently, Con Edison service area residents are qualified for a Megawatt Block incentive rate of $0.20 per added watt of solar power. Through the Megawatt Block, homeowners in the Upstate can receive $0.30 per watt of solar energy added. The Long Island Megawatt Block initiative has ended.

State Sales Tax Exemptions in New York City

Proceeds from the retail sale and installation of commercial solar power system components are exempt from sales and use tax under Chapter 406 of the Laws of 2012. The exemption relates directly to the 4% state sales and use tax as well as the state's 3/8% sales and use tax in the Metropolitan Commuter Transportation District (MCTD).

Also, this legislation permits cities and counties in the state to grant similar exemptions from local sales and use taxes. Earnings from the sale or installation of commercial solar energy system equipment are only exempt from state sales and use taxes if the locality specifically enacts the exemption.

Commercial solar energy system equipment is defined by the New York Sales and Use Tax Law as an arrangement or combination of parts placed on nonresidential premises that use solar radiation to generate energy for the purpose of providing heating, cooling, hot water, and/or electricity.

Any premises that don't fit the description of a residence are considered nonresidential premises for the purposes of this definition. A residence is a building, whether owned or leased, according to TSB-M-05(11)S.

A single-family home, a multi-family building made up solely of residential dwelling units, or a residential dwelling unit or units within such a multi-family building, including an apartment, a cooperative apartment, or a condominium unit, are all included in this description.

Equipment for non-solar energy systems is not included in commercial solar energy systems. Therefore, as equipment for business, solar energy systems, pipes, controls, insulation, and other components of traditional gas, oil, or electric heating and cooling systems are not exempt.

A correctly filled out Contractor Exempt Purchase Certificate must be submitted by the contractor to the supplier for the purchase of commercial solar energy systems equipment. This must be done to qualify for this exemption. To qualify for this exemption, non-vendors must send a properly completed Exempt Use Certificate to the vendor or contractor, marking Box U on Part III.

Sales made and services provided on or after September 1, 2005, are free from this exemption.

Electricity Purchases Under Solar Power Purchase Contracts

The New York Sales and Use Tax was revised as of September 1, 2022. According to the revised Sales and Use Tax Law, certain sales of electricity produced by equipment for domestic or business solar energy systems and sold in accordance with a written solar power purchase agreement (PPA) are exempt from sales and use tax. Sales and Use Tax Exemption for Solar-Generated Energy Sold Under a Solar Power Purchase Agreement is described in TSB-M-15(5)S.

The 4% state and the 3/8% Metropolitan Commuter Transportation District (MCTD) sales and use taxes are not applied to these transactions. Sales are only exempt from municipal sales and use taxes if the taxing authority chooses to offer this exemption.

The local sales and use taxes for electricity produced and sold under a PPA are listed by the New York State Department of Taxation and Finance in its publication, Publication 718 PPA.

Residential Electricity

The option to offer this exemption is available to counties, cities, and some school districts that levy municipal sales and use tax on the sale of residential electricity. Please note that the 4% state and 3/8% MCTD sales and use taxes are already waived for purchases of residential electricity.

The local sales and use tax rates that apply to residential sales of energy produced and sold under a solar PPA are listed in Part 1 of this document. Local governments or educational institutions not mentioned in Part 1 do not impose sales taxes on residential energy produced and sold under a solar PPA.

They may, however, impose a tax on other services sold to residences. Local Sales and Use Tax Rates on Residential Energy Sources and Activities is published as Publication 718-R.

Non-Residential (Commercial) Electricity

The local sales and use tax rates for nonresidential electricity purchases made pursuant to a solar PPA are listed in Part 2. Localities with a tax rate of 0 in Part 2 have chosen to offer this relief. All other non-residential utility sales, however, are taxed at the total amount of tax in those jurisdictions.

New York’s Renewable Energy Profile

Initially implemented in 2004, New York's renewable portfolio standard (RPS) was the first of its kind in the United States. New York's RPS was in effect until 2015, when it was replaced by the Clean Energy Standard (CES).

The Clean Energy Standard in New York mandates that, by 2030, utilities and other electricity retail suppliers in the state must obtain 50% of their electricity from renewable energy sources. New York State's Climate Leadership and Community Protection Act went into effect in July 2019. By 2030, 70% of energy must come from renewable sources, and by 2040, all electricity must be carbon-free.

The law also mandates a complete elimination of carbon emissions across the entire economy by the year 2050.

The state's nuclear power facilities are a source of clean energy with no harmful emissions. To get closer to the 100% net-zero objective, facilities that can't eliminate all carbon emissions on their own can buy carbon offsets. The carbon reduction sources used as credits must be geographically close by. Forests and agricultural land are examples of such sources. In 2020, New York had the lowest carbon dioxide emissions from energy production of any jurisdiction.

In terms of the amount of electricity generated from renewable resources in 2021, New York ranked 5th in the country. The state came 6th in the nation in terms of the amount supplied by utility-scale installations.

Hydroelectric Power

In 2021, hydroelectric power generated 73% of the state's total renewable energy generation. Hydroelectric power also constitutes about 22% of the total net generation from all sources in the state. New York is usually one of the top four hydroelectricity producers in the United States.

Apart from Washington and Oregon, the state generated more hydroelectric power in 2021 than any other state. The 2,500-megawatt Robert Moses Niagara hydroelectric power facility, located near Niagara Falls in Lewiston, generates the majority of New York's hydropower. The facility is the third-largest standard hydroelectric power station in the United States in terms of capacity. During peak power consumption, the associated Lewiston pumped-storage hydroelectric plant supplements power from the Robert Moses plant. The facility has two pump turbines and a storage reservoir covering 1,900 acres.

Wind Energy

The second-largest renewable source of energy generation in New York is wind. In 2021, wind energy made up 11% of the state's renewable electricity and 3% of New York's overall net generation. Nearly 2,200 megawatts of wind power were available in New York at 29 utility-scale wind fields as of mid-2022. The eastern part of New York's two Great Lakes is where most of the state's extra onshore wind energy potential is found. This is along the shoreline of Long Island and the Catskill and Adirondack mountain ranges. The highest peaks in the state are located in state parks, where wind growth is limited. Offshore wind resources are also available in New York along the shoreline of Long Island and in the two Great Lakes. By 2035, the state required the installation of at least 9,000 megawatts of offshore wind power. More than 4,300 megawatts of offshore wind electricity are currently under construction.

Solar Energy

In 2021, solar energy contributed 3% of the state's total net generation. More than two-thirds of the energy was generated by small-scale systems with outputs of less than 1 megawatt. New York encourages rooftop solar installations and other small-scale solar installations with net metering and a variety of financial support programs.

In 2021, the state ranked fourth in the country for small-scale solar electricity generation. The majority of the over 300 utility-scale solar PV installations in New York have capacities of less than 20 megawatts. There are, however, five major solar facilities with capacities of at least 20 megawatts. Except for one, they are all on Long Island.

Since January 2020, roughly half of New York's utility-scale solar capacity has become operational. New York was projected to have 3,466 megawatts of solar PV capacity from utility-scale and small-scale installations by July 2022. The state increased its previous solar PV capacity goals of 3,000 megawatts by 2023 and 6,000 megawatts by 2025 to 10,000 megawatts or more from solar initiatives less than 5 megawatts in size by 2030.

Biomass Energy

In 2021, less than 2% of New York's total net generation was powered by biomass. Nevertheless, the state placed 11th in the quantity of electricity generated from biomass. Almost three-fifths of the state's biomass-generating capacity comprises municipal solid waste facilities. There are numerous smaller landfill gas-powered generators located throughout New York.

They account for roughly one-fourth of the state's capacity to generate energy from biomass. Two utility-scale wood and wood waste-fueled facilities in New York make up roughly one-sixth of the state's biomass-generating capacity. In 2021, they contributed nearly a quarter of the state's biomass-fueled electricity generation.

New York has other biomass and biofuel resources that are used for purposes other than power generation. Five pellet facilities in the state have an annual production capacity of approximately 354,000 tons of pellets.

Wood pellets are utilized for both heating and electricity generation. The state also has a fuel ethanol production facility with a production capacity of about 62 million liters per year. Meanwhile, the state consumed about 488 million gallons of fuel ethanol in 2020. This amount is the fourth-highest of any jurisdiction. The state of New York has no biodiesel production. Despite this, the state was the seventh-largest biodiesel consumer in the United States in 2020. However, biodiesel consumption per capita was lower than in approximately two-thirds of the states.