New York City is not particularly sunny, but the high local price of electricity increases the value of self-generated solar energy. New York's electricity rates are among the highest in the country: Residential customers can expect to pay about 27 cents/kWh, while small businesses pay about 20 cents/kWh. The potential to reduce electricity bills is a strong incentive to deploy solar energy, and there are also many discounts and tax benefits for photovoltaic systems. When big savings are combined with a low cost of ownership, solar energy becomes an attractive upgrade for New York properties.
Solar energy in New York State grew 800% between 2011 and 2016 alone, and this was possible in large part due to locally available incentives. For example, the New York State Energy and Development Authority's (NYSERDA) NY-Sun Incentive Program has helped provide affordable solar energy to many homes and businesses. Solar photovoltaic systems are also exempt from sales and property taxes while providing state and federal tax credits calculated based on the cost of the system.
There is a Clean Energy Standard for New York State, which requires that 50% of all energy consumed by 2030 be generated from renewable sources. The NY-Sun Incentive Program is playing a key role in making this possible and is expected to have benefited 150,000 homes and businesses by 2020, with a total installed capacity exceeding 3,000 megawatts.
How does the NY-Sun incentive program work?
The NY-Sun Incentive Program manages solar rebates independently for three regions: the Con Edison service area, the PSEG Long Island service area, and the northern region of the state. The incentive program is also divided by customer type:
- Residential photovoltaic systems of up to 25 kW.
- Small commercial photovoltaic systems up to 200 kW (500 kW in the PSEG Long Island area).
- Commercial and industrial photovoltaic systems over 200 kW, excluding PSEG Long Island.
The NY-Sun program will last until solar PV capacity targets are met, but incentive rates are not constant throughout the duration of the program. Target capacity for each region and customer type is divided into “blocks” that are filled as capacity targets are met, and the incentive value decreases each time a block is completed.
New York City: Con Edison Service Area Incentives
Solar PV capacity targets for Con Edison's service area are 311 MW for the residential sector, 311.5 MW for the small commercial sector, and 425 MW for the large commercial and industrial sector (combined). Therefore, the total capacity target for Con Edison's service area is 1,047.5 MW.
Residential Sector
The 311 MW allocated to the residential sector are divided into nine blocks. By August 2017, the first 6 blocks had been filled and about 50% of the block 7 target had been achieved, leaving the residential incentive at $0.40 per watt.
|
Block |
Photovoltaic capacity (MW) target |
Incentive fee |
|
1 |
14 |
1.00 |
Small Commercial Sector
The incentive calculation is different for solar PV systems in the small commercial sector, as there are two discounts per block: the higher rate applies to the first 50 kW of capacity, and there is a reduced rate for all capacities above 50 kW. kW and up to 200 kW. Block 4 is nearly full as of August 2017, meaning the incentive will soon be reduced to $0.60/W for the first 50 kW and $0.40/W for all capacity up to 200 kW.
|
Block |
Photovoltaic capacity (MW) target |
First 50 kW incentive |
Incentive up to 200 kW |
|
1 |
6 |
1.00 |
0.60 |
Large Commercial and Industrial Sector
The solar photovoltaic capacity target is greater for the large commercial and industrial sector and is divided into a total of 13 blocks. Only the first block was filled by August 2017, and block 2 is about 40% filled.
|
Block |
Photovoltaic capacity (MW) target |
Incentive fee |
|
1 |
15 |
0.63 |
Additional NY-Sun Incentive Programs
In addition to incentives for homes and businesses, NY-Sun also administers programs for schools, low-income families, renters and communities.
The K-Solar program offers free feasibility studies to New York City school districts. If a school has suitable conditions, a solar photovoltaic system is delivered at zero cost. A specialized company operates the system and carries out maintenance, while the school only pays for the energy generated through an Energy Purchase Agreement, at a price lower than the concessionaire's tariff. In other words, this approach allows schools to reduce their energy expenses without taking on an upfront capital expense or loan.
The Acessible Solar program is aimed at customers who own their own home and who have a family income below 80% of the municipality's median income. This program doubles the regular NY-Sun discount, meaning an eligible Con Edison customer would receive $0.80/W instead of $0.40/W.
Community solar projects are an attractive option for homes and small businesses that don't own the space they occupy or don't have a roof. With this program, they can subscribe to a shared solar PV system near them to reduce their energy bills. Generally, there are two types of subscriptions: participants can purchase energy from the matrix at a price lower than the concessionaire's tariff, or they can purchase a part of the matrix itself and are entitled to an equivalent fraction of the energy generation.
The Solarize program offers free technical assistance to home and business owners who plan to purchase a group solar PV system, allowing them to benefit from economies of scale and better pricing.
Combining NY-Sun Tax Incentives and Benefits
New York State also offers a tax credit for solar photovoltaic systems, allowing 25% of the costs to be deducted from state taxes, up to $5,000. This can be combined with the federal renewable energy tax credit, which allows a 30% deduction. These benefits also apply when the solar PV system receives a discount, but are calculated based on the price after deducting the discount.
The combination of NY-Sun incentives and tax benefits makes solar photovoltaic systems very affordable in New York, and this increases the return on every dollar invested upfront. However, it is important to work with qualified contractors to ensure that a solar photovoltaic system delivers your financial benefits. Product warranties are also important as they protect the photovoltaic system owner from additional costs if a component fails prematurely.
