Solar Credits

Federal

The residential energy efficient property credit allows for a credit equal to the applicable percent of the cost of qualified property. Qualifying properties are solar electric property, solar water heaters, geothermal heat pumps, small wind turbines, fuel cell property, and, starting December 31, 2020, qualified biomass fuel property expenditures paid or incurred in taxable years beginning after that date. Only fuel cell property is subject to a limitation, which is $500 with respect to each half kilowatt of capacity of the qualified fuel cell property. Generally, this credit for alternative energy equipment terminates for property placed in service after December 31, 2023. The applicable percentages are:

1. In the case of property placed in service after December 31, 2016, and before January 1, 2020, 30%.
2. In the case of property placed in service after December 31, 2019, and before January 1, 2023, 26%.
3. In the case of property placed in service after December 31, 2022, and before January 1, 2024, 22%.

New York

Taxpayers are entitled to claim this credit if they:

• purchased solar energy system equipment,
• entered into a written agreement for the lease of solar energy system equipment, or
• entered into a written agreement that spans at least ten years for the purchase of power generated by solar energy system equipment not owned by you.

The solar energy system must use solar radiation to produce energy for heating, cooling, hot water, or electricity for residential use.  The system must also be installed and used at your principal residence in New York State.

The credit is equal to 25% of your qualified solar energy system equipment expenditures and is limited to $5,000.

• The solar energy system equipment credit is not refundable. However, any credit amount in excess of the tax due can be carried over for up to five years.