New York proves that solar power can be implemented successfully even with moderate sunshine if there are incentives for home and business owners who deploy solar panels. New York is among the leading states in terms of renewable energy policy, with a goal of generating 50% of all energy from clean sources by the year 2030.
The two largest utility companies in New York are Consolidated Edison, which is privately owned, and the Long Island Power Authority, which is municipal. Other privately-owned utilities with a significant market share include Orange & Rockland Utilities, Central Hudson Gas & Electric, Rochester Gas & Electric, New York State Electric & Gas, and National Grid.
The average price of electricity offered by these utilities in New York is 17 cents per kilowatt-hour (kWh), and nearly 19 cents per kWh in New York City. These are some of the highest rates in the nation; for comparison, the national US average price is 13 cents per kWh. Home and business owners can achieve significant savings by generating their own electricity with solar panels.
The NY-Sun PV Incentive Program offers a rebate of up to $400 for each kilowatt (kW) of installed solar capacity. Residential installations of up to 25 kW are eligible, and the cap goes up to 200 kW for non-residential customers. NY-Sun also offers a rebate program for low and middle income families through the Affordable Solar Program. If household income is below 80% of the New York state median income, an additional rebate of $400 per kW can be claimed through this program.
It is important to note that rebate funding is generally limited by utility; not all homeowners in New York are eligible to receive the PV Incentive Program rebate. As solar power continues to grow in the state of New York, rebate funding will expire. The sooner you decide to install solar panels, the higher the likelihood that you will get this incentive.
New York also has significant tax incentives available for installing solar panels. There are four separate tax benefits owners of solar PV systems can claim:
When you add both tax credits, the total deduction can reach up to 55% of your investment in solar panels! This makes the technology highly affordable in New York, and is one of the main reasons why the industry is growing so quickly in the state.
In New York, rebates and tax credits cover more than half of your solar power investment, so taking a low-interest loan is a very smart financial move. The combination of incentives lets you pay off a significant portion of the loan, and the rest can be easily paid off with energy savings, especially when you consider the high price of electricity in the state.
The debt financing approach works best when you have access to a loan with a low interest rate and a long repayment period. Although you give up a small portion of your potential savings in the form of interest, you gain two significant advantages. First, you can install solar panels with no upfront cost, and second, you can offset your full loan payment with your electricity savings.
A Power Purchase Agreement is another way to reduce your utility bills with solar power without any upfront cost or debt financing. Basically, you sign a contract with a solar power company under the following terms:
With a PPA, the solar company that owns the panels gets to claim all the rebates and tax incentives. While you personally cannot claim any of the government incentives with a PPA, you still get to take advantage of them. The solar company will claim the incentives and pass the savings on to you by offering you a lower electricity rate. A PPA is attractive if you do not want to invest any money upfront and don’t want to worry about system performance.