There are a number of generous incentives for solar power in New York State, and NY’s Solar Equipment Tax Credit is one of them. The Solar Tax Credit plays a major role in making solar energy installation in New York state a bright idea. But who qualifies to claim it and how much is it?
Did you know? With tax credits you can save up to 25% if you get a system installed in New York State. If you own your system, you can save up to 47.5%. By shopping on our New York Solar Marketplace you can see these and other incentives in action, as well as compare quotes from multiple installers. Get started with an instant estimate today.
In this series:
- Part 1: New York Solar Tax Credit basics – How much is it and how do you claim it?
- Part 2: How to claim New York’s Solar Tax Credit if you own your system
- Part 3: How to claim New York’s Solar Tax Credit if you go solar with a lease or PPA
Please note: We here at EnergySage are solar experts, not tax experts! Tax codes are complicated, so consult your tax advisor before deciding what is best for you.
Who is eligible to claim the NY Solar Tax Credit?
In order to be eligible for New York State’s Solar Equipment Tax Credit, you must meet the following criteria:
- You are a New York State resident
- You have had a solar energy system (used for heating, cooling, hot water or electricity generation) installed on your principle residence in New York State
- You have a tax liability in New York State
- In the case that you went solar with a lease or power purchase agreement (PPA), that the term of your contract is at least 10 years
Perhaps the greatest thing about NY’s Solar Tax Credit is that you can claim the credit regardless of whether you purchase your system (with cash or with a solar loan), or you go solar with a solar lease or PPA.
How much is the NY Solar Tax Credit and when can you claim it?
The New York State’s Tax Credit is equal to 25% of your solar costs or $5,000 – whichever is lower. Unlike a tax deduction (which reduces your tax liability and is therefore only worth a fraction of its dollar value, a tax credit can be subtracted directly from your tax bill, dollar-for-dollar. This means that it you can count it as pure savings (assuming, of course, that you have sufficient tax liability.)
Fortunately, New York’s Solar Tax Credit is one of the most flexible of its kind in the country – you can ‘roll over’ excess credits for up to five years. You can claim it regardless of whether you’ve purchased your solar energy system or you’ve gone solar under a solar lease/PPA program (in which case you may claim credits for up to 15 years). However, the how and when of claiming the credit are slightly different depending on which of these options you go with.
The following two articles go into more detail about the how the Solar Tax Credit works in these situations:
What forms do you need to claim the New York Solar Tax Credit?
In order to claim the Solar Tax Credit, you will need to fill out form IT-255 when you file your taxes. You can find the latest version of form IT-255 here on Tax.NY.gov.
But that’s not all: Other incentives for solar available to you in New York State
There are a suite of generous incentives that complement the fantastic financial benefit that New York’s Solar Tax Credit offers. The federal Investment Tax Credit and NY State’s Megawatt Block Incentive Structure also two other programs that defray the cost of going solar. Additionally, the state’s Net Metering program ensures that you get paid full retail value for the electricity that you produce but don’t consume at home. Combined, these incentives help to make solar panels a great investment in New York State.
Want to learn more? EnergySage can help
The best way to find a good deal on a solar energy system is to comparison shop. Our job is to make it easy for you to compare offers from a range of installers – and to understand how incentive programs like NY’s Solar Tax Credit contribute to the financial case for going solar. Get started with an instant estimate or sign up to shop on our New York Solar Marketplace today.