NY, Cuomo Pushing Hard for New Incentives

 The Empire State continues to step up as an emerging national leader in supporting residential solar, as Governor Cuomo's recent budget plan includes new provisions that will open more opportunities for homeowners to install panels on their roof. The provisions are just the latest proposed measure to expand access to PV installations and lay the foundation for a well-grounded solar industry that can grow beyond the bust-and-boom stages common to markets still reaching maturity.

The first provision in the plan proposes to extend the sales tax exemption on solar purchases to commercial solar system owners. The current sales tax exemption only applies to residential solar purchases, which the budget plan also calls to renew. Purchases of any non-excluded good in New York has a minimum 4% state sales tax, in addition to taxes collected by local jurisdictions. The solar exemption only applies to the 4% state sales tax.

The second provision extends the current personal income tax credit to homeowners that lease a system. The state's 25% tax credit previously applied only to New York homeowners that owned the system. Now, Gov. Cuomo proposes a tax credit equal to 12.5% of the annual leasing costs for those that opt out of owning their PV system outright. The credit can be carried forward five years in the event that it's larger than the applicant's annual tax liability.

With the addition of these incentives, a homeowner interested in leasing panels on his roof saves an average of $1,400 on his system (approximately $1,200 from the sales tax exemption and $200 from the tax credit), meaning the leasing payments can generate more savings on his utility bills over a more flexible period of time. Even if the program only attracted residential PV system owners and provided the maximum incentive to applicants, the program would support over 300 new systems in its first year. Moving forward to 2016, each year after 2012 would provide funds for over 800 systems/year, as funding would step up from $2m/year to $5m/year. These projections assume average cost reductions of $6,200/applicant, with the tax credit maxing out at $5,000 for system owners and the sales tax exemption of $1,200. Again, these are the most conservative estimates, also assuming nobody leases a system and every recipient installs a residential system. Bringing on this many systems in a five-year period will generate electricity savings that will put money in the pockets of consumers (in a still-recovering economy) and reduce the electricity load for grid operators to provide by a minimum of 40,000 MWh.

 Posted by Stuart Ivy