NYC Solar Incentives and Property Tax Abatement for Solar Photovoltaics
New York state government passed legislation allowing for a property tax abatement on solar PV equipment expenditures. Enacted in 2008, the legislation dictates that buildings with rooftop solar PV in cities of 1 million or more people are eligible for tax abatements. The population requirement limits the abatement to solar systems in New York City. All buildings are eligible except for utility-owned property. While the abatement deadline was the end of 2012, the Senate extended the compliance period until 2016.
The tax abatement allows building owners who have solar systems installed on their buildings to deduct a portion of the expenditures of installing solar from their total real property taxes. The incentive is not unlike investment tax credits for renewable energy systems; however, the benefits are received in the form of reduced property taxes, as opposed to reduced income taxes.
The total property tax benefit varies depending on the year the solar system was installed: systems installed between 2008 and 2010 received benefits of 35% over four years; systems installed between 2011 and 2012 received 20% over four years; those installed in 2013 received 10% over four years; systems installed between 2014 and 2016 received 20% over four years.
Maximum abatement during a year amounts to around $62,500, and unused balances in one year do not roll over to the next year. Expenditures that are covered include materials, labor, planning, designing, and installation costs. However, costs taken using federal or state grants, as well as interest and finance charges, are not covered. On the other hand, the number of eligible expenditures is not reduced by federal, state, or local tax credits, abatements, exemptions, or rebates. It should be noted that the tax abatement is unaffected by if a building owner can claim New York’s real property tax exemption on value added to their property by various renewable energies.
Policies like these are beneficial in helping the solar industry grow, and it is due in large part to them that photovoltaic systems are becoming more economically viable every year.
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