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Tax Credits and Exemptions in New York State

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New York is ranked among the top ten states for solar power in the U.S. It’s no surprise that NY has supportive state programs which are helping residents save additional money with their residential solar panel systems. There are two programs in particular which reward New Yorkers with tax credits and property tax exemptions.

New York Residential Solar Tax Credit

This is a personal income tax credit for residential solar systems. The credit is available for the value of 25% of the total cost of the system’s parts and installation, up to a $5,000 maximum. If a system isn’t owned outright by the homeowner, but is under a lease or power purchase agreement (PPA), the credit is available if the duration of the contract is over ten years. In these situations where the homeowner is making payments for the system, the credit amount is still 25% of the total amount paid by the homeowner for the length of the contract. Additionally, the $5,000 cap remains in place for all types of solar ownership agreements. The system size must be under 25 kW – the average residential solar system size is 8 kW. We summarize this information below, and if you want more information please see the official NYS Department of Taxation description of the Solar Energy Equipment System Credit.

25%

NY Residential Solar Tax Credit Value

The credit available is 25% of the total cost of the system and installation

$5,000

Maximum Tax Credit Amount Available

25 kW

Maximum System Size

In order to qualify for the credit, the system must be under 25 kW, however this is not a problem for homeowners, since the average residential solar installation is 8 kW.

New York State Property Tax Exemption

Many homeowners are concerned that adding solar panels to their home will increase their property taxes. Although it’s true that the overall value of your property will increase, New York State has a Property Tax Exemption for residential solar power. This means that although you are adding value to your home by installing solar power, you will not have to pay any increases in your property taxes for 15 years after the system is installed. While the exemption is available state-wide, each municipality (county, city, town, village and school district) has the option to opt out of this exemption. In some cases, the school district may not allow the exemption for example. Homeowners would then have to pay an increase only on their school taxes, but not on their county or city property taxes. Learn more about the New York state solar property tax exemption.

More Resources on Solar Costs in NY

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