Under construction. If you have questions, please email us and we will not only answer your question, but add an explaination to this site.

Disclaimer: We are not your tax advisor or attorny, so don't hold us responsible for any mistakes here. The statute can be very difficult to follow, and thus there is a risk of error. In the end your taxes are your responsibility.

Federal tax credits

  • 30% tax credit for solar electric systems (photovoltaic)
    • This is for solar electric property "placed into service" on or after 1/1/2009.
    • Should I wait until 1/1/2009? If you sign a contract now, by the time the system is approved and "placed into service" it will likely be after 1/1/2009 so there is no point in waiting for 1/1/2009.
    • You can carry forward the tax credit until you have used it.
    • As of 2009 this can offset AMT (Alternative Minimum Tax).
    • 30% of what? It is 30% of the cost after any utility provided rebates. This is not exactly crystal clear in the statute or the tax forms. The best analysis of this We have found is by the Solar Energy Industries Association.
  • 30% tax credit capped at $2000 for solar thermal (hot water) systems.
    • You can carry forward the tax credit until you have used it.
    • The system must be capable of providing 50% of hot water needs
    • The system must not be used for a pool or hot tub
    • It may be possible to extend the system in a later tax year and claim a credit subject to a fresh $2000 cap. Read the statute (we have seen different interpretations).
    • The system must be rated by Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed. It is unclear whether all components in a system must be rated or just the major components (panels).
    • As of 2009 this can offset AMT (Alternative Minimum Tax).
  • 30% tax credit capped at $2000 for geothermal heating or cooling systems.
    • This appears to have largely the same rules as the solar thermal credit.
    • Geothermal units can be equipped with domestic hot water heaters (desuper heaters), which may qualify for a nonbusiness energy property credit.
  • Tax credits are also available for:
    • Combined heat and power (CHP) systems $1500 per 0.5KW
    • Wind power (30% capped at $4000)
    • Fuel cells $1500 per 0.5KW
    • Micro turbines
    • $500 Nonbusiness energy property credit, for energy efficiency improvements like insulation and windows are extended for 2009, but may be limited by claims from prior years.
  • The law.
    • Energy Policy Act of 2005. The statute can be found in the library of congress and in PDF format via GPO. On Aug 8, 2005 this Became Public Law No: 109-58. See Sec 25D pages 440 to 441 of the PDF.
    • As ammended by Emergency Economic Stabilization Act of 2008 (H.R. 1424). On Oct 3 2008 this became Public Law 110-343. It was part of what was referred to as 'pork' added to the $700,000,000,000 bail-out of 2008. This removed the $2000 cap on tax credits for photovoltaic systems.
  • Tax forms

NY state tax credits and incentives

  • 25% tax credit capped at $5000 for solar electric systems (photovoltaic)
    • You can carry forward the tax credit for up to 5 days until you have used it.
    • 25% of what? It is 25% of the cost after any utility provided rebates. This is made clear in the statute.
    • This credit is subject to federal tax. For example, if you receive a state rebate in 2010 for a system placed into service in 2009, then in April 2011 you will owe federal income tax on the state rebate (thus reducing the value of the rebate).
    • The statute: NY law, article 22, part 1, section 606
    • Tax form (2007) go to NY Dept of Taxation for latest copy.
    • Sales tax exempt.
    • Most areas have property tax exemptions for solar and energy conservation improvements.
  • Other incentives these are mostly outside of LIPA service region, NYSERDA excludes LIPA service region.

Other states' incentives

  • www.dsireusa.org is the Database of State Incentives for Renewables and Efficiency. This is a very comprehensive list of incentives. Note that state tax credits are subject to federal tax.
  • Check your local utility's web site. Here is a site for National Grid in the USA.

LIPA service region

  • Solar Pioneer Program
    • Currently $3.50 per watt for solar electric installations
    • Capped at $35,000 (10KW)
  • Home Performance with Energy Star
    • 10% capped at $3000 or discounted financing. For LIPA service region Home Performance with Energy Star energy efficiency upgrades. A whole house approach is used, an approved contractor will have to perform an energy audit (including a blower door test). This can be very informative.
  • Ground source heat pumps
    • $1000 per installation. More details here