Residential Solar Tax Credit (New York)
Last modified on February 12, 2015.
Financial Incentive Program
|Name||Residential Solar Tax Credit|
|Incentive Type||Personal Tax Credit|
|Applicable Sector||Residential, Multi-Family Residential|
|Eligible Technologies||Solar Water Heat, Solar Space Heat, Photovoltaics|
|Energy Category||Renewable Energy Incentive Programs|
|Amount||25% for solar-electric (PV) and solar-thermal systems; for third-party owned systems this is in reference to the aggregate amount owed under the contract rather than the amount owed in any single year|
|Carryover Provisions||Excess credit may be carried forward five years|
|Eligible System Size||25 kW maximum, except 50 kW for solar systems owned by condominium or cooperative housing associations|
|Equipment Requirements||Systems must be new and in compliance with all applicable performance and safety standards|
|Start Date||01/01/1998 (solar electric); 01/01/2006 (solar thermal)|
|Installation Requirements||Electricity generation systems must be grid connected and net metered.|
|Maximum Incentive||5,000 for solar-energy systems|
|Program Administrator||New York State Department of Taxation and Finance|
|References||DSIREDatabase of State Incentives for Renewables and Efficiency|
Enacted in August 1997, this personal income tax credit originally applied to expenditures on solar-electric (PV) equipment used on residential property. The credit, equal to 25% percent of the cost of equipment and installation, was expanded in August 2005 to include solar-thermal equipment. The solar-thermal provisions apply to taxable years beginning on and after January 1, 2006. The credit is capped at $3,750 for solar-energy systems placed in service before September 1, 2006, and capped at $5,000 for solar-energy systems placed in service on or after September 1, 2006.
In August 2012 the credit was amended yet again (A.B. 34) to allow it to be claimed for systems installed under lease or power purchase agreements (PPAs) of at least 10 years in length. For third-party owned systems, the residential homeowner may claim a tax credit in the amount of lease or PPA payments made during the taxable year, for up to 15 years. The 25% incentive for such systems refers to aggregate amount of payments owed rather than the amount made during any single year. The maximum allowable tax credit amount of $5,000 applies to the total amount of credits claimed regardless of the ownership arrangement..
Solar-energy equipment is defined as "an arrangement or combination of components utilizing solar radiation, which, when installed in a residence, produces energy designed to provide heating, cooling, hot water or electricity." The credit may not be used for pool heating or other recreational applications. Any amount of credit that exceeds a taxpayer's liability in a given tax year may be carried forward for the five following taxable years. Any portion of the system cost provided by a non-taxable federal, state, or local grant is not eligible for this credit.
In general systems must comply with the 25 kW capacity limit on residential, net-metered solar-energy systems. However, in 2007 legislation was passed increasing the capacity limit to 50 kW for condominiums and cooperative housing associations. In addition, members of condominium management associations and tenant stockholders of cooperative housing associations are now allowed to claim a proportionate share of the total system expense towards the tax credit. These changes took effect beginning in the 2007 tax year, but as with other portions of the tax credit, they do not have an expiration date.
Interested participants can claim for the credit through filling out Form IT-255 (Claim for Solar Energy System Equipment), including specific instructions for the credit.
|Contact Name||Taxpayer Assistance - Personal Income Tax Information Center|
|Department||New York State Department of Taxation and Finance|
|Address||W.A. Harriman Campus|
|Place||Albany, New York|
Authorities (Please contact the if there are any file problems.)
|Authority 1:||NY CLS Tax, Article 22 § 606 (g-1) et seq.|
|Date Effective||01/01/1998 (solar electric) 01/01/2006 (solar thermal)|
|Date Enacted||08/02/1997 (solar electric)|
|Authority 2:||A.B. 34|
- Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.