NY Solar Tax Credit & Incentives 2022-2023

New Yorkers (like solar incentives in California ) also get two unique benefits for going solar-NY solar tax credit and a solar incentive called NY-Sun Megawatt Block Program to deal with high electricity consumption. Apart from these two state solar incentives, they can take advantage of the 30% federal solar tax credit on their federal tax return.

While the Solar Energy System Equipment Credit as per section 606(g-1), under which a taxpayer is allowed a credit for the expenditure of some specific solar energy system equipment installed on your principal residence that uses solar radiation to produce energy for heating, cooling, hot water, or electricity for residential use,

What is the definition of Solar energy system equipment?

Solar energy system equipment is defined under sub-clause (d) of New York Consolidated Laws, Public Service Law – PBS § 66-j.

(d) “Solar electric generating equipment” means a photovoltaic system (i) (A) in the case of a residential customer (other than a farm utilizing a residential meter), with a rated capacity of not more than twenty-five kilowatts;  (B) in the case of a customer who owns or operates a farm operation as such term is defined in subdivision eleven of section three hundred one of the agriculture and markets law utilizing a residential meter with a rated capacity of not more than one hundred kilowatts;  and (C) in the case of a non-residential customer, with a rated capacity of not more than two thousand kilowatts;  and (ii) that is manufactured, installed, and operated in accordance with applicable government and industry standards, that is connected to the electric system and operated in conjunction with an electric corporation’s transmission and distribution facilities, and that is operated in compliance with any standards and requirements established under this section.

What qualifies for the NY solar tax credit?

Certain conditions must be fulfilled to be eligible for getting the solar tax credit.

1. The solar energy system must use solar radiation to produce energy for heating, cooling, hot water, or electricity for residential use.
2. The solar energy equipment must be installed and used at your principal residence in New York State.
3. All solar energy system equipment connected to a single net meter is considered part of the same solar energy system for purposes of the solar tax credit.
4. If the solar energy system equipment produces electricity, you must enter into a net energy metering contract with your electric corporation or comply with the electric corporation’s net energy metering schedule before you can qualify for the credit.
5. The completed solar energy system equipment must also be connected to the electric corporation’s transmission and distribution facility. Other conditions and limitations set by the electric company may also apply. You should contact your electric company for more information before you purchase your equipment.

How much is the NY solar tax credit?

The solar tax credit by the state of New York is equal to 25% of your qualified solar energy system equipment expenditures and is limited to $5,000.Another vital point is that the solar energy system equipment credit is not refundable. That means if you have a tax liability, this credit can reduce it up to $5,000, but if there is a net balance, it is not refundable. However, you can carry forward any excess of the solar tax credits for up to five years for adjustment with a NY state tax liability of future years.

How to claim the solar tax credit?

In order to claim the credit, there is a statutory form that a taxpayer must file Form IT-255, Claim for Solar Energy System Equipment, carefully after going through its instructions.

What about NY-Sun Megawatt Block Program?

The Megawatt Block incentive (on average, between $1,000 to $3,000) is a pet project of the New York State Energy Research and Development Authority (NYSERDA) to make clean energy more accessible to New Yorkers. The homeowners get incentives for installing solar panels based on where they reside in the state and the amount of expenditure on the solar systems installed.

The incentive program has divided the whole of New York into three zones-Con Edison, Upsate, and Long Island.So, people living in Con Edison’s territory get an incentive rate of $0.20 per watt of solar installed, whereas residents of the Upstate region are eligible for $0.40 per watt installed. Long Island residents are currently not given this incentive.

In order to qualify for the incentive, the solar panel system must be installed by a participating NY-Sun contractor and cannot exceed 25 kilowatts (kW) in size.