2023 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 2023 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Ontario solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

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What Solar Tax Credits, Incentives, and Rebates are Available in Ontario?

State of NY Commercial PACE Financing Program

Incentive Type:
PACE Financing
Locally determined

Residential Solar Tax Credit

Incentive Type:
Personal Tax Credit
25% for solar-electric (PV) and solar-thermal systems; for third-party owned systems this is in reference to the aggregate amount owed under the contract rather than the amount owed in any single year

Refundable Clean Heating Fuel Tax Credit (Corporate)

Incentive Type:
Corporate Tax Credit
$0.01/gallon for each percent of biodiesel

NY-Sun Loan Program

Incentive Type:
Loan Program
Residential Customers: $1,500 - $25,000

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

Incentive Type:
Sales Tax Incentive
100% exemption

Local Option - Solar Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
Upon local authorization, 100% exemption from local sales tax

Solar Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% exemption from state sales tax

Local Option - Real Property Tax Exemption for Green Buildings

Incentive Type:
Property Tax Incentive
Upon local adoption, 20% - 100% of real property taxes owed; varies by year and certification level

Energy Conservation Improvements Property Tax Exemption

Incentive Type:
Property Tax Incentive
100% of the value added to the residence by the improvements

Local Option - Solar, Wind & Biomass Energy Systems Exemption

Incentive Type:
Property Tax Incentive
100% exemption for 15 years (unless local jurisdiction has opted out)

NY-Sun PV Incentive Program (Residential, Low-Income, and Small Business)

Incentive Type:
Rebate Program
Incentive rates step down over time as MW goals are met. Incentive rates as of 11/27/2019 are:

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)
Learn more:

Ground Source Heat Pump Rebate Program

Incentive Type:
Rebate Program
Small Systems (≤ 10 cooling tons): $1,500/cooling ton
Large Systems (> 10 cooling tons): $1,200/cooling ton

Home Performance with ENERGY STAR

Incentive Type:
Loan Program

NY Green Bank

Incentive Type:
Other Incentive

Refundable Clean Heating Fuel Tax Credit (Personal)

Incentive Type:
Personal Tax Credit
$0.01/gallon for each percent of biodiesel

On-Site Wind Incentive Program

Incentive Type:
Rebate Program
Tier I: 10,000 kWh of expected annual energy production: $3.50/annual kWh
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

Incentive Type:
Performance-Based 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

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives are intended to encourage people to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You may qualify for different kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of New York and others from the federal government. Types of solar incentives might include:

  • Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
  • Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value of your solar system when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
  • Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your Ontario utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
  • Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.

The ITC originally covered 30% of the cost of installing a solar system, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Talking to your local Ontario solar panel installer is the best way to understand how the ITC could apply to you.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. This percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to get in touch with your local Ontario solar panel installation expert.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives might be handled by your county or municipality, or by the New York government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Ontario

Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from your local utility company, the New York government or the federal government. When you're ready to make the switch to solar energy, getting in touch with your local Ontario solar panel installation expert is an excellent place to start.

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EcoWatch's Ontario, NY Solar Incentives FAQs

My home already has solar panels installed. Does my system qualify for any incentives?

If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local Ontario solar installer, can help you learn what incentives you qualify for.

How much can I save on my electric bill annually if I install solar panels on my Ontario home?

Once you add solar panels to your house in Ontario, you can expect to save approximately $739.69 per year, or approximately $14,054.16 over the next 20 years.

When does the federal solar tax credit end?

The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

If I change out my appliances for ones that use solar energy, are there any credits that I can claim?

The new Inflation Reduction Act creates a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.

Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?

Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming the correct incentives and that you're getting the most money possible.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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