Solar incentives are exciting but a sometimes confusing topic to address. There is no “one-size-fits-all” way to apply solar rebates and tax credits, and as the packages expire and change, it can be difficult to keep up. We’re here to help you understand what is available to you as a solar customer right now so you can cash in on the most current savings!

The Federal Investment Tax Credit

The Federal Investment Tax Credit (ITC) is the most important of the bunch. The ITC offers 26% of your project costs back as a tax rebate the year after you install a system. There is no cap on this resource, so many clients can see as much as $10,000 off their system cost due to utilizing this credit. The residential rate expires in 2024, while the industrial credit will remain at 10%.

Accelerated Depreciation

Like most capital improvement projects, commercial solar customers can depreciate their solar investment as a means of getting tax relief on an ongoing basis. When the Federal ITC is taken on a project, the customer can still depreciate up to 85% of the taxable base of the project. With commercial customers, this amounts to tens or hundreds of thousands of dollars of tax relief.

New York Tax Credit & Other Exemptions

Lawmakers negotiate the NYS Solar Tax credit on a year-by-year basis. As long as NYS continues to push its nation-leading renewable goals, we don’t see this credit going anywhere. A New York solar customer can get as much as 25% of their system cost, up to $ 5,000 back in NYS tax credits when they invest in solar tech.

Additionally, NYS has created some additional tax programs to incentivize investment that makes solar in the Empire state even more attractive.

In addition to the NYS solar tax credit, NYS is one of 29 states with a solar property tax exemption. The NYS Solar Property Tax Exemption is a powerful tool that helps you increase your home’s value without paying the price. When applicable, adding solar panels to your home is exempt from property tax increases for fifteen years. Individual communities can opt out of this program, but to date, the vast majority of the state has honored this exemption. While in some residential scenarios, the impact of this exemption might be minimal, for commercial clients, access to this program means thousands in savings every year. Solar can increase a home or business’s value up to $3 per watt installed. For an average residential system, that’s $21,000 in increased home value you don’t need to pay taxes on!

In addition to the property tax exemption, solar customers don’t need to worry about paying sales tax on their systems. NY is one of 18 states that leverages the benefits of reduced sales tax. Unlike other types of capital improvement projects, investing in solar comes tax-free, saving customers hundreds, if not thousands, of dollars on the up-front costs of a project.

All of these benefits are currently accessible, and given NYS’ recent goal of 100% renewable power by 2040, it’s likely these programs will be expanded soon rather than phased out.