A residential solar energy system can range in price from $15,000 – $100,000 before incentives depending on roof size and energy needs, but the average system is worth about $30,000. With the current incentive programs a homeowner would pay roughly 30% of that cost, and the balance would be covered by the federal, state, and city incentives. Whether you choose to lease, finance, or purchase a system your cost will be significantly less than staying with the utility company as your system will produce tens of thousands of dollars worth of energy over it’s useful life.
The exact cost of installing a solar system depends on the size of the system, the type of equipment, and the current New York solar rebates and incentives. Everyone’s electric needs and available roof space, and preferences for saving are different so it is important to get a customized quote for your home to discuss your options.
What Are The Government Tax Incentives Or Rebates Involved?
Installing solar panels in New York involves several incentives programs that make the installation process easier and affordable.
Current Federal & New York Solar Rebates
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 and 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. The average system size is about 7 kW, but you can receive this rebate up to 25 kW. ConEdison territory has the highest incentive level in the state.
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.
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. It requires a special filing method with the DOB called a professional certification of objections, so make sure you ask your solar contractor how they will be filing to ensure you are receiving all of the incentives you are entitled to.
What Does It Cost Me?
Whether you choose to purchase, finance, or lease your system you are making a sound decision to simply pay less for something you need to purchase. Solar energy systems not only save you money, but they increase the value of your home. If you choose to own your panels you will end up paying about a quarter of the gross cost of the system which will pay itself off from day one if you choose to finance with $0 out of pocket, or roughly 4-5 years if you pay for the system upfront. With leasing options you will be saving from day one with a huge immediate savings between your NY State Personal Tax Credit and your NYC Property Tax Abatement.
Your solar specialist will work with you to find the solution that makes the most sense for your needs and goals for your solar project.