3 New York Solar Incentives Running Out in 2023
What New York lacks in sun, it more than makes up for with incentives that reduce the cost — and increase the savings — of going solar. From tax credits, to upfront rebates, to sales and property tax breaks, New York has perhaps the most robust set of solar incentives in the US.
However, there are three incentives at risk of running out in 2023 that New York homeowners should know about:
- The NY-Sun Megawatt Block incentive
- The New York City solar property tax abatement
- 1-to-1 net metering
In this article, we’ll go over how each incentive works and explain why it’s at risk of running out in 2023.
Start a solar project to see which incentives you qualify for.
Solar incentives running out in New York
While there are three incentives at risk of running out in 2023, it’s important to note that the two biggest incentives are here to stay. These are the 30% federal solar tax credit and the 25% New York solar tax credit. When combined, these two credits alone can reduce the cost of going solar by 55%.
The video below breaks down how this works:
But the more incentives you claim, the more you stand to save by going solar. And New York’s third largest solar incentive — the NY-Sun Megwatt Block rebate — is at risk of running out in 2023.
NY-Sun Megawatt Block Program
Run by NYSERDA, the NY-Sun Megawatt Block Incentive program provides upfront rebates based on the size and location of your solar system. It’s separated into three different regions throughout the state: Long Island, Upstate, and regions served by Con Edison. Each region is separated blocks with declining incentive levels as the program progresses.
The NY-Sun incentive was launched in 2014 and the incentive levels have been dwindling ever since. In fact, the Long Island region filled its final block in 2016 and both the Con Edison and Upstate regions are in their final blocks, as show below.
Incentives as of February 2023. Click the images to see the current availability of each region.
Even in its final stages, the NY-Sun incentive is well-worth claiming. In the last remaining blocks, the incentive is worth 20 cents per Watt in the Con Edison region and 30 cents per Watt in the Upstate region.
Here’s how this incentive adds up based on the size of your system:
|Size of solar system (kW)||Con Edison (20 cents per Watt)||Upstate (30 cents per Watt)|
It’s tough to say exactly when the NY-Sun program incentives will run out for each region. However, given the steep electricity rate hikes in 2022, solar demand in New York is expected to increase and eat away at the NY-Sun incentive in 2023.
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NYC Solar Property Tax Abatement
In 2008, New York State passed legislation providing property tax abatements to residents who install solar and live in cities with populations greater than 1 million. The only city in the state with a qualifying population is New York City, so only residents of the Big Apple are eligible for the city’s property tax abatement for their photovoltaic system costs.
The NYC solar property tax abatement has been extended several times, but it is currently schedule to expire on January 1, 2024. That means NYC residents have until the end of 2023 to have their system installed and inspected to qualify for the solar property tax abatement.
How does the NYC solar property tax abatement work?
The NYC solar property tax abatement is a reduction in how much property tax by 5% of the installed cost of your solar system each year, for four consecutive years. The program is capped at $62,500 per year and does not allow for unused balances to be rolled over into subsequent years.
So, if you pay $20,000 for a solar system, the abatement reduces your property taxes by $1,000 for four years, for a total $4,000 incentive.
The abatement applies to solar costs including:
- Design and planning of the system
- Installation labor
It does not apply to:
- Costs incurred using a federal, state, or local grant
- Interest or finance costs
The tax abatement can be combined with the NY-Sun rebate and the state and federal tax credits. However, the value is based on the cost of the system after the NY-Sun rebate.
For example, John from Brooklyn buys a 5 kW solar system for $20,000, the NY-Sun rebate lowers the upfront cost to $19,000. That means he can deduct 5% of $19,000 — or $950 — for four years for a total deductible of $3,900.
|Gross price of solar system (5 kW)||$20,000|
|NY-Sun rebate (20 cents/Watt)||-$1,000|
|Price paid for solar system||$19,000|
|Year 1 property tax abatement||$950|
|Year 2 property tax abatement||$950|
|Year 3 property tax abatement||$950|
|Year 4 property tax abatement||$950|
|Total abatement amount||$3,900|
Like the NY-Sun rebate, the NYC solar property tax abatement is nothing to sneeze at. However, this incentive has an expiration date of January 1, 2024.
Start a solar project today with multiple quotes from vetted local installers.
Net metering in New York
The final New York solar incentive at risk of changing or going away in 2023 is the state’s 1-to-1 net metering policy.
Net metering is the billing structure that credits solar owners for the excess electricity they push onto the grid in order to offset the cost of the electricity they pull off the grid when their panels aren’t producing. In 1-to-1 net metering programs, the value of electricity pushed onto the grid is equal to the value of electricity pulled off the grid.
In 2017, New York began transitioning its net metering policy to a new compensation program called the Value of Distributed Energy Resources (VDER) tariff or Value Stack. The value stack compensates solar owners for their exports based on the perceived value it provides at the moment it’s pushed onto the grid. In general, it lowers the value of exports and is less favorable to solar owners than net metering.
Beginning in 2022, solar owners can choose between Phase One Net Metering and the Value Stack, however both options included Consumer Benefit Charge (CBC) based on the size of the system and utility provider.
Now, even with the CBC, the Phase One Net Metering program is very favorable to solar owners. However, the key words are Phase One. This is designed to be a transitional program and it’s not exactly clear how long it will be on the table.
One-to-one net metering is one of the strongest incentives for solar owners and, as many people learned with NEM 3.o in California this year, should not be taken for granted.
Get your New York solar incentives while they’re hot
New York created a wide range of solar incentives in first two decades of the 2000’s that have helped thousands of homeowners go solar. However, with the cost of solar plummeting and the 30% federal tax credit in place until 2032, many of these incentives are nearing their final stages and unlikely to be renewed.
So, the trick to getting maximize solar savings in New York is to jump on these incentives while they are still around!
Connect with an Energy Advisor to start your solar project today.