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Entry Level Certificate of Knowledge

New York Solar Energy Society

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New York Solar and Fuel Cell Tax Credit


New York - Solar and Fuel Cell Tax Credit

Incentive Type: Personal Tax Credit
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Photovoltaics, Fuel Cells
Applicable Sectors: Residential, Multi-Family Residential
Amount: 25% for solar-electric (PV) and solar-thermal systems; 20% for fuel cells
Maximum Incentive: $5,000 for solar-energy systems; $1,500 for fuel cells
Carryover Provisions: Excess credit may be carried forward five years
Eligible System Size: 10 kW maximum for solar-electric systems*, except 50 kW for solar systems owned by condominium or cooperative housing associations;
25 kW maximum for fuel cells
Equipment/Installation Requirements: Systems must be new and in compliance with all applicable performance and safety standards
Authority 1: NY CLS Tax, Article 22 § 606 (g-1) et seq.
Date Enacted: 08/02/1997 (solar electric)
Date Effective: 01/01/1998 (solar electric); 01/01/2003 (fuel cells); 01/01/2006 (solar thermal)

Summary: 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.  

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 amount of the system cost provided by a grant from any source is not eligible for this credit.  

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.  

Systems must comply with the 10 kW capacity limit on residential, net-metered solar-energy systems*. 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 take effect beginning in the 2007 tax year, but as with other portions of the tax credit, they do not have an expiration date.  

Fuel cells installed at a principal residence are eligible for a 20% tax credit, with a maximum credit of $1,500. To qualify, fuel cells must provide a maximum rated baseload capacity of 25 kW and must utilize proton exchange membrane (PEM) technology.  

*The language of the tax credit generally requires that PV systems conform to the state's net metering law, thereby limiting system size to 10 kW. In August 2008, the state net metering law was expanded by S.B. 7171 to permit net metering for residential PV systems up to 25 KW. It is unclear at this point whether the state intends for the new net metering limits to apply to the tax credit described above. The 2008 Solar and Fuel Cell Tax Credit Form IT-255 does not specifically address this issue.

Contact: Taxpayer Assistance - Personal Income Tax Information Center
New York State Department of Taxation and Finance
W.A. Harriman Campus
Albany, NY 12227
Phone: (518) 457-5181
Phone 2: (800) 225-5829

Web Site: http://www.tax.state.ny.us

NYSERDA - PV Incentive Program

Incentive Type: State Rebate Program
Eligible Renewable/Other Technologies: Photovoltaics
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Institutional, (Must be customer of investor-owned utility in NY)
Incentive Amount: $2-$5/watt DC. Varies by sector, installed capacity, and system type;
Incentive may be reduced for potential production losses associated with shading, system orientation, tilt angle, and other factors
Maximum Incentive: Maximum determined by sector and incentive amounts.
Residential: $28,000
Non-residential: $240,000
Non-profit, gov't, schools: $137,500
Numbers above include bonus incentives for BIPV, Energy Star Homes
Eligible System Size: None specified, but systems may not exceed 110% of demonstrated energy demand.
Equipment Requirements: Systems must be new, UL-listed, and compliant with all applicable performance and safety standards; minimum five-year warranty on all equipment and two-year warranty on battery back-up systems.
Installation Requirements: Installation must comply with all federal, state and local codes; must be grid-connected and installed by a pre-approved contractor; must comply with New York's Standard Interconnection Requirements
Program Budget: $75.3 M (2008-2009)*
Ownership of Renewable Energy Credits: NYSERDA for first 3 years of system operation, thereafter customer/generator
Funding Source: RPS surcharge
Expiration Date 12/31/2009
Project Review/Certification Systems may be inspected by NYSERDA and/or other authorities having jurisdiction; Performance monitoring and data reporting required for first 3 years of system operation
Web Site: http://www.powernaturally.org/


The New York State Energy Research and Development Authority (NYSERDA) provides incentives of $2 to $5 per watt (DC) to eligible installers for the installation of approved, grid-connected photovoltaic (PV) systems. The maximum capacity supported by the program is 8 kW for residential systems; 80 kW for non-residential systems; and 25 kW for non-profits, schools and municipalities. Larger systems are eligible for incentives, but incentives may only be received for installed capacity up to the program caps. Incentives are only available to eligible installers, and incentives must be passed on to customers. Once eligible, installers reserve incentives for approved systems, for specific customers, on a first-come, first-served basis for as long as funds are available.  
During 2008 and 2009, this program will provide $75.3 million in funding for PV systems.* The program continuously accepts applications from installers who seek to participate. The goal is to increase the network of eligible installers across the state, offering customers a choice of qualified or certified installers in their area.  
Installer eligibility will be determined and maintained based on factors such as acceptance of all program terms and conditions, training, installation experience, track record related to utility interconnections, overall performance, monitoring, customer references, customer satisfaction, and commitment to become certified through a national certification program. NYSERDA is providing accredited training opportunities for PV installers to the greatest extent possible. Training opportunities are posted at www.powernaturally.org. The program web site (listed above) provides a list of eligible installers. There are currently more than 80 installers on the list.  
Program incentives effective February 3, 2009, based on direct-current (DC) module ratings at standard test conditions, are as follows:
  • Residential Incentives: $3.00/W up to 4 kW, $2.00/W for next 4 kW up to a maximum of 8 kW per site meter  
  • Non-Residential Incentives: $3.00/W up to 40 kW, $2.00/W for next 40 kW up to a maximum of 80 kW per site meter  
  • Schools, non-for-profit organizations, and municipalities: $5.00/W up to a maximum of 25 kW per site meter  
  • Bonus incentive: $0.50/W for Energy Star Homes and building integrated PV (BIPV) systems
Exemptions to the capacity caps may be provided on a case-by-case basis and NYSERDA reserves the right to limit the incentives available per customer/site. PV systems must be sized to meet specific site energy needs (local load or demand) and may not exceed 110% of the demonstrated energy demand for the site, taking into account any other on-site electrical power generation systems. Incentive levels will be reduced in proportion to potential output losses of greater than 20% for traditional PV systems and 40% for building integrated systems, as determined by the required installer system analysis.  
Incentives will be paid to installers in two increments and are tied to specific installation milestones. The first incentive payment, or 75% of the total incentive amount approved by NYSERDA, will be paid after all system components have been delivered to a customer’s site and the appropriate form is completed, submitted and approved by NYSERDA. The second incentive payment, or the remaining 25%, will be paid after a PV system has been connected to the utility grid and/or inspected by NYSERDA or its representatives and the appropriate form has been completed, submitted and approved by NYSERDA. The Energy Star Home bonus incentive will not be paid until the home has been registered with the New York State Builders Association.  
Customers who pay the state's RPS charge are eligible to participate in the PV Incentive Program. These includes customers of the following utilities: Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation, Orange and Rockland Utilities, and Rochester Gas and Electric Corporation. NYSERDA will hold the title to renewable energy credits (RECs) associated with the system's energy production for a period of three years, after which REC ownership will revert to the customer/generator.  
PV incentives are available for many end-uses (building or non-building) and sectors, including the residential, commercial, industrial, agricultural, institutional, educational and non-for-profit facilities, and government sectors. Incentives provided to customers under this program may not be combined with any other incentive programs offered by NYSERDA, such as a dollar-per-watt incentive, designed to directly offset the cost of a PV installation. However, commercial incentives may be combined with assistance from the Energy Smart Loan Fund to the extent such assistance is available.  
*The original Customer-Sited Tier Operating Plan authorized $13.8 million for this program during 2008 and 2009. However, discretionary funding amounting to $4.4 million was later added in order to meet program demand. Supplements of $20.6 million (PSC order) in October 2008 and $21.5 million (NYSERDA reallocation) were made through February 2009 in order to keep the program open. Finally, an additional $15 million in program funding was authorized in June 2009 by order of the PSC, bringing total 2008-2009 funding to $75.3 million. The June 2009 PSC order contains a detailed description of this progression.

  Public Information - NYSERDA
New York State Energy Research and Development Authority
17 Columbia Circle
Albany, NY 12203-6399
Phone: (866) 697-3732
Phone 2: (518) 862-1090
Fax: (518) 862-1091
E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Web Site: http://www.nyserda.org

Solar Sales Tax Exemption

Incentive Type: Sales Tax Exemption
Eligible Renewable/Other Technologies: Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics
Applicable Sectors: Residential
Amount: 100% Exemption
Authority 1: NY CLS Tax, Article 28 § 1115 (ee)
Date Enacted: 07/26/2005
Date Effective: 09/01/2005


New York enacted legislation in July 2005 exempting the sale and installation of residential solar-energy systems from the state's sales and compensating use taxes. The exemption applies to solar-energy systems that utilize solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity. The exemption does not apply to solar pool heating or other recreational applications. There does not appear to be an expiration date* for this incentive.  
The law also permits local governments (municipalities and counties) to grant an exemption from local sales taxes. If a city with a population of 1 million or more chooses to grant the local exemption, it must enact a specific resolution that appears in the state law. The New York Department of Taxation and Finance publishes a variety of sales tax reports detailing local tax rates and exemptions, including those for solar energy equipment. The solar sales tax list (Publication 718-S) is updated several times per year.  
*The New York Code contains duplicate sections NY CLS Tax § 1115 (ee). The first pertains to the sales tax exemption for residential solar energy systems and contains no expiration date, while the second contains rules for an unrelated exemption with expiration dates of December 1, 2010 and December 1, 2012. This appears to be a mistake that will not affect the sales tax exemption for residential solar energy equipment.

  Taxpayer Assistance - Sales Tax Information Center
New York State Department of Taxation and Finance
W.A. Harriman Campus
Albany, NY 12227
Phone: (800) 698-2909
Fax: (800) 748-3676
Web Site: http://www.tax.state.ny.us


A personal, residential tax credit for solar water heat, solar space heat, photovoltaics, and fuels cells. Up to $5000 for solar energy systems and $1500 for fuel cells.

New York PV Incentive Program

A state rebate program that providing rebates for $2 - $5 per watt DV. includes commercial, industrial, residential, nonprofit, schools, government, and institutional.

Solar Sales Tax Exemption

A 100% sales tax exemption for passive solar space heat, solar water heat, solar space heat and photovoltaics for residential applicants.


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