Go Solar in New York State
New York is ranked in the top 5 states for home solar power. That’s because of the state’s legislative commitment to good solar practices and also because of its rebate program and solar tax credit, which make solar investing a sure bet. One option in New York and elsewhere is utilizing a PPA. A power purchase agreement (PPA), or electricity power agreement, is a contract between two parties, one which generates electricity (your power company) and one which is looking to purchase electricity (you). With a lease or PPA, the solar installation company puts panels on your roof at no cost to you, and you buy the electricity they produce for cheaper than you would have paid the utility company.
New York Solar Incentives
Avoided Cost of Power
When it’s a sunny day and there is an abundance of solar energy, there is a significant decrease in cost for the customer. The resulting savings, which would have been spent on fuel, is about 3 cents per kWh. Factor in savings on operations and maintenance (about 1.4 cents per kWh) since there is no power plant.It’s estimated that New Yorkers save almost $30,000 over the course of 20 years by installing solar panels. The savings add up when you choose solar.
NY State Personal Tax Credit
New York State also has a personal tax credit (PTC) of up to $5,000 for homeowners who choose to purchase, finance, or lease their system. It is calculated as 25% of your cost after the NYSERDA rebate with a $5,000 maximum amount. Most systems will qualify for the full amount, and your solar specialist will calculate this for your system. You will claim this through your NY State tax filing using form IT-255. This personal tax credit is one of the most significant financial reasons but you should hurry and get your system installed before this credit expires.
NYC Property Tax Abatement
In October 2014 the New York State Senate passed Bill S0746A to extend and increase the property tax abatement for solar energy systems made on buildings in cities with 1 million or more people, which is currently only New York City. The property tax abatement (PTA) is calculated as 20% of your system value after your NYSERDA rebate, paid out equally over 4-years through a line item reduction in your property taxes. Whether you choose to purchase, finance, or lease your system you are entitled to this abatement. We will handle the paperwork with the Department of Buildings on your behalf. To learn more about the this tax abatement, click here.
Federal Investment Tax Credit
All 50 states are eligible for a 30% Federal Investment Tax Credit (ITC) to reduce the cost of the system. This is calculated as 30% of the value of your system after the upfront NYSERDA rebate. If you choose to purchase or finance your system this tax credit goes to you directly through your federal tax return, and if you choose to lease your system will be assigned to your leasing partner which ultimately lowers your cost. Your solar specialist will calculate this for you and can consult with your accountant to fill out Form 5695 to claim your credit.
In New York State we have a program to lower the initial cost of a system to make the economics more attractive to the end user called the Megawatt Block Program. NYSERDA will reserve your incentive based on the size of your system and the current incentive level. This is great news as it lowers the gross cost by thousands of dollars, but is a time sensitive rebate and as more homeowners choose to switch to solar the incentive continues to decrease in value. ConEdison territory has the highest incentive level in the state which means you stand to save more than your friends upstate.
New York Electricity Prices
New York is tied for the nation’s 7th highest electricity prices
Cost per kwh (cents)
Why are electricity prices important?
The power your solar panels produce reduces your electric bill. The higher the price of power, the more you save by generating your own.
And if electricity prices are low in your state, it might be because your utility company gets most of its energy from cheap coal. That makes solar less economical, but doesn’t take into account the long-term environmental costs of cheap fossil fuels.