New York State Extends and Expands Solar Energy System Tax Incentives


[author: Donald T. Ross]

Governor Andrew Cuomo, as part of his ongoing “NY-Sun” program intended to accelerate customer-sited solar electricity capacity in New York State, recently signed into law three bills which further this initiative.

Chapter 406 of the Laws of 2012 exempts 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 grants 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.

Chapter 375 of the Laws of 2012 extends 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.

Chapter 401 of the Laws of 2012 extends 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.


Published In: General Business Updates, Energy & Utilities Updates, Environmental Updates, Residential Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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