New York State’s Solar Tax Credit : 25% savings on your solar energy costs

new york state solar tax credit 2016 energysage

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:

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.





New Yorkers can save money on solar




How much is the NY Solar Tax Credit and when can you claim it?

cost of solar in new york graphic energysage 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:

Claiming New York’s Solar Tax Credit if you own your system

Claiming New York’s Solar Tax Credit with a solar lease / PPA

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.

NY Solar Tax Credit - Schedule A

Screenshot from Form IT-255: Claim for Solar Energy System Equipment. Schedule A has lines to fill in your solar energy expenditures, whether you purchased your system or went solar with a lease/PPA. (Source: 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.





New Yorkers can save money on solar




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.

7 thoughts on “New York State’s Solar Tax Credit : 25% savings on your solar energy costs

  1. Brian Glueck

    Will NY State extend the 25% up to $5000 tax credit for solar beyond the current 12/31/16 expiration date ?

    Reply
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  3. Tim Clark

    I received the full $5k in 2016 for the solar panel installation in NY. I know this tax credit is nonrefundable. Is this nonrefundable tax credit considered federal taxable income? I am using H&R Block software and it is considering this credit as federal taxable income and therefore is making me owe $1200 more than I would without it AND it is giving me a $21 penalty for not taking out enough taxes. Something doesn’t sound right. Please help.

    Reply
    1. Jeff

      I am in the same situation and am wondering if there is a way to let the feds know that the NYS tax “return” i received last year was actually the tax credit for installing solar panels.

      Reply
    2. Musictax

      If in the previous year on your Federal return you deducted NY taxes withheld,
      then when you claim a credit that refunds those taxes back to you, this means you have
      to ‘pay back’ the deduction you took for those taxes.
      You deducted them, but then you pay back the dedction for the amount of those
      taxes that you actually get back.

      Reply
  4. Abigail Farrell

    Do state-owned municipality services, such as water treatment plants, qualify for these tax benefits too?

    Reply

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