Solar Panels -- tax benefit? NY resident

[Classof2015]

My sister is trying to figure out if it’s worth it to install solar panels. She has gotten proposals from solar panel installation companies who extoll the tax benefits, but she’s trying to find that information from an unbiased source. Where do I direct her to look? Anyone done this and knows what the tax benefits are? Thanks in advance.

[mathmom]

https://www.tax.ny.gov/pit/credits/solar_energy_system_equipment_credit.htm

Everyone I know who has bought or leased panels seems happy.

These are the notes I took at a neighborhood association meeting in 2016. Some of the tax provisions and local costs for energy may have changed in the meantime.

The homeowner may either buy or lease the panels. Buying is generally the better choice for the homeowner, because the price is fixed (no change in rental rate), both the federal and state governments have tax incentives programs, NYS has 3.49% interest loan a program (through NYS Energy Research Development Authority), which is paid as part of the monthly electricity bill, and NYS gives give out rebates. The federal tax credit is 30% of the cost of the panels and the state tax credit is 25% of cost of the panels up to $5,000. Homeowners can end up paying no money up front. Ownership adds to property value, because the solar panels and energy savings are sold with the house.

Leasing is generally the less desirable option, because the company gets the benefits of all the incentives and it can change rates throughout the lease. The owner must sell house with lease and many buyers do not want to buy the lease.

NYS gives a rebate of 25% of kilowatt hours saved. How much can be saved is determined up front by multiplying # panels x wattage on each panel. The homeowner must still pay a $17 delivery charge from Con Ed.

The solar panels generate only electricity, not heat, so that during the prime use months (April-October), when trees have more leaves and properties have more shade, the panels are not so effective.

If there is a blackout, the solar panels shut down so that Con Ed does not have electricity pushing back on the system when it is trying to fix it.

Permitting may be one of the biggest challenges; process can be long – 5-6 months

[Classof2015]

Thank you, mathmom!

[greenwitch]

Also, you can use the federal tax credit only once in your life. It’s probably the same for the state tax credit. So it makes sense to consider if she’ll be in this house for a long time or if she should wait for the next one.

[Classof2015]

Ah good point greenwitch – she just bought this one and plans on being there. Thanks.