2025 Solar Incentives Guide for Lancaster, NY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lancaster.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Lancaster?
State of NY Commercial PACE Financing Program
Residential Solar Tax Credit
Refundable Clean Heating Fuel Tax Credit (Corporate)
NY-Sun Loan Program
Small Business and Not-for-Profit Organizations:
Participation Loans: up to $100,000 (at low interest rate)
On-Bill Recovery loans: $50,000 at 2%
Residential Wood Heating Fuel Exemption
Local Option - Solar Sales Tax Exemption
Solar Sales Tax Exemption
Local Option - Real Property Tax Exemption for Green Buildings
Energy Conservation Improvements Property Tax Exemption
Local Option - Solar, Wind & Biomass Energy Systems Exemption
NY-Sun PV Incentive Program (Residential, Low-Income, and Small Business)
Residential:
Long Island Region: $0.00/W (MW blocks have been fully subscribed)
Con Edison Region: $0.30/W
Upstate Region: $0.35/W
Low-to-Moderate income customers: $0.80/W (up to 10 kW)
Small Commercial (Non-Residential):Long Island Region: $0.00/W (MW blocks have been fully subscribed)
Con Edison Region: $0.60/W
Up State Region: $0.45/W
Multifamily Affordable Housing Adder: additional $0.40/W (up to 50 kW)
Ground Source Heat Pump Rebate Program
Large Systems (> 10 cooling tons): $1,200/cooling ton
Home Performance with ENERGY STAR
Refundable Clean Heating Fuel Tax Credit (Personal)
On-Site Wind Incentive Program
Tier II: 10,000 kWh - 125,000 kWh of expected annual energy production: $1.00/annual kWh
Tier III: 125,000 kWh - 1,000,000 kWh of expected annual energy production: $0.30/ annual kWh
Tier IV: Greater than 1,000,000 kWh of expected annual energy production: $0.15/ annual kWh
These incentives are additive.
Anaerobic Digester Gas-to-Electricity Rebate and Performance Incentive
- Capacity Incentive: Varies on the construction and design of the system
- Performance Incentive: $0.025/kWh production payment for new systems for up to 10 years (estimated using a capacity factor of 75%)
- Interconnection Incentive: up to 75% of the costs exceeding $5,000
- Project Enhancement Incentives: Available for Black Start Capability, Hydrogen Sulfide reduction, design for accepting food waste and others
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are handled by the state of New York or by your utility company, county or municipality. Types of solar incentives might include:
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Net Metering: You can sign a net metering contract with your Lancaster utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your home.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC applies to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, equipment, labor and accessories – although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To best understand how the ITC may apply to you, get in touch with your local Lancaster solar panel installation expert and ask for more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Lancaster solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. Certain incentives are ongoing, while others might only be available for a limited time. Incentives might be offered by your county or municipality, or by the New York government.
Next Steps for Installing Solar in Lancaster
You can qualify for solar incentives from the New York government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Lancaster solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Lancaster, NY Solar Incentives FAQs
My home already has solar panels. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your system, or any local Lancaster solar installer, can help you understand what incentives you might want to apply for.
I want to switch my appliances out for ones that are more energy-efficient. Are there any incentives I can get?
The new Inflation Reduction Act includes provisions for a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you receive but usually yes, you can claim multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to make sure you are claiming all possible incentives and applying them in the correct order.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss the details of your plan with your local Lancaster solar installation expert, to make sure you know what you'll need and what incentives you will or won't qualify for.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.
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