Solar Tax Incentives and Rebates
Most people are aware that solar will ultimately save them money, but some also believe that solar has a large upfront cost, which isn’t true! With financing and leasing programs available, homeowners can now go solar for $0 upfront and start saving immediately. Whether you choose to own or lease your system, there are several incentives that lower the cost to pennies on the dollar.
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 and we will handle the paperwork with the Department of Buildings on your behalf.
Average Value of Property Tax Abatement
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 the credit through your NY State tax filing using form IT-255. This personal tax credit is one of the most significant financial reasons why you should hurry and get your system installed before it expires.
Average Value of Personal Tax Credit
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.
Average Value of Investment Tax 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 it is a time sensitive rebate, because 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.
Average Value of NYSERDA Rebate
Solar System Costs
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 also 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 huge immediate savings between your NY State Personal Tax Credit and your NYC Property Tax Abatement.