3 New York Solar Incentives At Risk of Running Out in 2024 | Solar.com

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3 New York Solar Incentives At Risk of Running Out in 2024

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 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 2024.

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 2024, 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 into 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 shown below.

con edison NYSERDA block

Incentives as of December 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 of solar capacity installed — which adds up to thousands of dollars in upfront cost reduction.

Size of solar system (kW) NY-Sun incentive value (Con Edison and Upstate)
5 kW $1,000
7.5 kW $1,500
10 kW $2,000
12.5 kW $2,500
15 kW $3,000

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 and 2024, solar demand in New York is expected to increase and eat away at the NY-Sun incentive in 2024.

 

 

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 was scheduled to expire on January 1, 2024. Fortunately, legislation passed in late 2023 extended the incentive until 2034 and expanded the abatement from 20% to 30% beginning in 2024.

How does the NYC solar property tax abatement work?

For systems installed prior to 2024, 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. Altogether, that amounts to a tax abatement worth 20% of the cost of the system. The program is capped at $62,500 per year and does not allow for unused balances to be rolled over into subsequent years.

Solar systems installed after January 1, 2024 qualify for a 30% abatement — or 7.5% of the installed cost each year for four years.

The abatement applies to solar costs including:

  • Design and planning of the system
  • Installation labor
  • Equipment

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. TIf the system as installed before 2024, he can deduct 5% of $19,000 — or $950 — for four years for a total deductible of $3,900. If it’s installed after 2024, he can deduct $1,425 per year for a total of $5,700.

20% abatement (before 2024) 30% abatement (after 2024)
Gross price of solar system (5 kW) $20,000 $20,000
NY-Sun rebate (20 cents/Watt) -$1,000 -$1,000
Price paid for solar system $19,000 $19,000
Year 1 property tax abatement $950 $1,425
Year 2 property tax abatement $950 $1,425
Year 3 property tax abatement $950 $1,425
Year 4 property tax abatement $950 $1,425
Total abatement amount $3,900 $5,700

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 2024 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 include a 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 the first two decades of the 2000s 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 are unlikely to be renewed.

So, the trick to getting maximum 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.

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