Earth Matters - April 2013: Making Solar Power More Affordable for New Yorkers

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New York State continues to be a national leader in renewable energy initiatives, particularly in encouraging practical, everyday applications of solar power. Recently, Governor Andrew Cuomo, as part of his ongoing “NY-Sun” program intended to accelerate customer-sited solar electricity capacity in New York State, signed into law three bills to promote this renewable energy program. These newly enacted statutes:

• Exempt the sale and installation of commercial solar energy systems—defined as systems which convert solar radiation to energy for cooking, hot water or electricity—from State sales taxes, beginning January 1, 2013, and grant municipalities (counties and cities) the power to exempt these systems from local sales tax. New York’s similar program for residential solar energy systems continues unchanged.

• Extend the existing 25% income tax credit for residential solar energy equipment expenditures to include payments for (1) leased solar energy systems under a lease of at least ten years duration and (2) purchase of power under a Power Purchase Agreement of at least ten years duration. It should be noted that the credit continues to apply to qualified expenditures directly related to construction.

• Extend the current four-year real property tax abatement in New York City for solar electric systems placed in service through the end of 2014, with the percentage of abatement for such systems changed to the lesser of (1) 2.5% of eligible expenses, (2) taxes payable in such tax year or (3) $62,500. Owners of most commercial and residential buildings, including cooperatives and condominium associations, are eligible for the tax abatement.

A typical development project utilizing renewable energy will utilize one or more of the above incentives with other targeted tax credits and New York State and federal incentives such as lowinterest loans or direct grants. Phillips Lytle has the cross-disciplinary expertise necessary to help clients achieve the maximum benefit from these programs.

For more information, please call Donald T. Ross, Special Counsel in the Phillips Lytle Energy and Project Development Practices, at (518) 472-1224 or dross@phillipslytle.com.