2025 Solar Incentives Guide for Ontario, NY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Ontario.
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 Ontario?
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/
Solar incentives are meant to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are offered by the state of New York or your utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates might be given by your local utility company, by your county or by your state.
- Net Metering: Be sure to speak with your Ontario utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when calculating the amount of property tax you need to pay on your house.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006, for you to claim the credit. Originally, the ITC covered 30% of all system costs (panels, labor, accessories and equipment), although this amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To understand exactly how much money the ITC could save you, speak with your local Ontario solar panel installer.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will then decrease slightly on a yearly basis until the end of the current program. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Ontario solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more may be offered at the state and local level. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives might come from the New York government, or from your specific county or municipality.
Next Steps for Installing Solar in Ontario
Solar incentives might come from the federal government, the New York government or your local utility company. The large number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Reach out to your local solar panel installation company today to learn more and to save the most money possible on a solar system for your Ontario home.
EcoWatch's Ontario, NY Solar Incentives FAQs
I already have solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your system – or reach out to a local Ontario solar installer — to better understand which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are some environmental benefits of adding solar panels to my house?
You can decrease your carbon footprint by 100 pounds of CO2 a year by installing solar panels. This adds up to roughly 2,000 pounds in 20 years. Solar is also a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money possible.
Can I use a combination of multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your ideas with your local Ontario solar installer. They can help you plan your project and also help you understand the various incentives that you will or won't qualify for.
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