On February 16, 2020, Governor Andrew Cuomo announced a new set of measures to combat the spread of the coronavirus. One of the initiatives calls for a 100% tax credit on solar equipment purchased for use on a private residential property in New York State. This credit will be available to both new and existing commercial and residential solar system purchasers. The other requirements for the credit include a 25 kW peak power capacity for a residential system and a 1,000 kW peak power capacity for a commercial system.
What Is A Solar Energy System?
A solar energy system is any type of device or appliance that utilizes solar energy as its source of power. This can include things like solar panels on the roof or ground of a home or building, standalone systems that produce electricity, or systems that generate both electric power and hot water for use in a home or business.
Depending on the specifics of the system, the benefits to the consumer can vary. While some systems are better suited to produce clean energy for the home, others may be more convenient for business use or other applications.
Why Purchase A Solar Energy System?
Many people choose to invest in a solar energy system for all sorts of reasons. Some of the more common ones include reducing energy costs for homeowners, businesses, and government entities; reducing the amount of material needed to heat and cool a home or building; becoming more energy efficient; and reducing one’s carbon footprint by generating power from renewable energy sources.
If all of these reasons sound good to you, then you should consider purchasing a solar energy system. Just remember that costs vary widely and depend on a number of factors, such as the size, shape, and capacity of your property, how many months of the year you use energy, and whether you are located in a region that enjoys abundant sunshine or has extreme weather conditions.
What Is The Difference Between A Residential And A Commercial Solar Energy System?
The first important thing to consider when deciding whether or not to purchase a residential or commercial solar energy system is the size of your property. The larger your property, the more potential there is for it to generate energy. For instance, if you have a 100 square foot roof that is only capable of producing 7 kWh of energy per day, you may not want to invest in a residential solar system because it won’t produce enough energy to meet your needs. But if the same 100 square foot roof produced 15 kWh of energy per day, you’d have enough power for both your home and office needs.
Residential systems are usually better suited for homeowners who have smaller properties. There are also some great options aimed at commercial users that produce more energy than you’ll need for a single home. To learn more, check out this list of the best commercial solar panels.
New York State Solar System Equipment Tax Credit
The new tax credit for solar energy systems in New York State will be available to both new and existing commercial and residential solar system purchasers. This credit will provide an income tax deduction of up to $15,000 for purchases made during the years 2020 through 2025. To qualify for this credit, you must purchase a solar energy system for either a business or residence, and you must use an estimated 90% of the generated power from the system directly on the property. You can’t just plug it in and use it elsewhere, which is usually the case with residential systems.
How Does This Tax Credit Work?
The tax credit for solar energy systems in New York State will be available as a deduction from income, in the same way that you might claim a mortgage interest deduction on your taxes. For homeowners, this deduction will be in the form of a credit on your 2020 taxes, and it will be available for the next four years. For business owners, the deduction will be in the form of a cash rebate, which will be applied to 2021 through 2025 taxes.
When Do I Have To File My Taxes?
If you want to claim the tax credit for a residential solar system on your taxes, then you have to file your taxes by April 15th, so make sure to do it early. The same goes for a business that purchases a commercial solar system. You have a couple of months before the deadline to file your taxes and get the credits applied.
This being said, if you purchase a solar system after the following dates, then you won’t be able to benefit from the tax credit:
- January 1, 2021 – March 31, 2023
- January 1, 2024 – March 31, 2026
- January 1, 2027 – March 31, 2029
- January 1, 2030 – March 31, 2031
- January 1, 2032 – March 31, 2033
- January 1, 2034 – March 31, 2035
- January 1, 2036 – March 31, 2037
- January 1, 2038 – March 31, 2039
- January 1, 2040 – March 31, 2041
- January 1, 2042 – March 31, 2043
- January 1, 2044 – March 31, 2045
- January 1, 2046 – March 31, 2047
- January 1, 2048 – March 31, 2048
Who Is Eligible For The Credit?
The credit for solar energy systems in New York State will be available to both new and existing commercial and residential solar system purchasers. Eligible taxpayers will be those who purchase a solar energy system for either a business or residence located in New York State and use an estimated 90% of the generated power from the system for direct use on the property. You can’t just plug it in and use it elsewhere, which is usually the case with residential systems.
Who Is Responsible For The Remaining 10% Of The Power?
The remaining 10% of the power that isn’t used directly on the property will be paid for by the taxpayer. This could mean that someone else will have to pay for the energy that is not directly applied to the use for which it was originally purchased. However, since this is considered a renewable energy source, and since you aren’t always going to need the full amount of power that a solar system generates, this may not be a bad thing.
Many people believe that the tax credit for solar energy systems in New York State will provide significant savings. Some estimates show that a residential solar system could save an average of $150 per month, with some systems being able to reduce energy costs by as much as $300 per month. If this sounds good to you, then consider purchasing a solar energy system.