Solar and Fuel Cell Tax Credit
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Personal Tax Credit |
Technologies: |
Solar Water Heat, Solar Space Heat, Photovoltaics, Fuel Cells |
Applicable Sectors: |
Residential |
Amount: |
25% for solar-electric and solar-thermal systems; 20% for fuel cells |
Maximum Incentive: |
$5,000 for solar-energy systems installed on or after 9/1/06; $1,500 for fuel cells |
Carryover Provisions: |
Excess credit may be carried forward five years |
Eligible System Size: |
10 kW maximum for net-metered solar-electric systems; 25 kW maximum for fuel cells |
Equipment/Installation Requirements: |
Systems must be new and in compliance with all applicable performance and safety standards |
| Law: |
Laws of NY, Article 22, § 606 (g-1) et seq. |
Summary: Enacted in August 1997, this personal income tax credit originally applied to expenditures on solar-electric (PV) equipment used on residential property. The credit, equal to 25% percent of the cost of equipment and installation, was expanded in August 2005 (S.5252) to include solar-thermal equipment. The solar-thermal provisions apply to taxable years beginning on and after January 1, 2006.
The credit is capped at $3,750 for solar-energy systems placed in service before September 1, 2006, and capped at $5,000 for solar-energy systems placed in service on or after September 1, 2006.
Any amount of credit that exceeds a taxpayer's liability in a given tax year may be carried forward for the five following taxable years. Any amount of the system cost provided by a grant from any source is not eligible for this credit.
Solar-energy equipment is defined as "an arrangement or combination of components utilizing solar radiation, which, when installed in a residence, produces energy designed to provide heating, cooling, hot water or electricity." The credit may not be used for pool heating or other recreational applications.
While there is no explicit limit on the size of a solar-electric energy system eligible for the tax credit, there is a 10-kilowatt capacity limit on residential, net-metered solar-energy systems.
Fuel cells installed at a principal residence are eligible for a 20% tax credit, with a maximum credit of $1,500. To qualify, fuel cells must provide a maximum rated baseload capacity of 25 kW and must utilize proton exchange membrane (PEM) technology |
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Green Building Tax Credit
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Incentive Type: |
Personal Tax Credit |
Eligible Efficiency Technologies: |
Comprehensive Measures/Whole Building |
Technologies: |
Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Fuel Cells, Daylighting |
Sectors: |
Commercial, Construction, Multi-Family Residential |
Amount: |
Varies by project, distributed over 5 years |
Maximum Incentive: |
$2 million per building |
Carryover : |
Indefinite carry forward |
Website: |
http://www.dec.ny.gov/energy/1540.html |
Authority 1: |
Laws of NY, Article 1, § 19 (2005) |
Date Enacted: |
5/4/2000, amended 2005 |
Expiration Date: |
12/31/09 for new certificates |
In 2000, New York State passed an innovative Green Building Tax Credit for business and personal income taxpayers. The credit can be applied against corporate taxes, personal income, insurance corporation taxes and banking corporation taxes. The incentive applies to owners and tenants of eligible buildings and tenant spaces which meet certain "green" standards. These standards increase energy efficiency, improve indoor air quality, and reduce the environmental impacts of large commercial and residential buildings in New York State, among other benefits.
The original 2000 legislation (Period one) allowed applicants to apply for a Credit Component Certificate in years 2001-2004 and to claim the credits over five years. Legislation enacted in 2005 (Period two) extended the program, allowing applicants to apply for a Credit Component Certificate from 2005-2009. Taxpayers who are issued an Initial Credit Component Certificates for Period two have nine taxable years (2006-2014) to claim the credits. The original law provided for $25 million in credit certificates; the 2005 legislation added another $25 million.
Owners and tenants must work through an architect or engineer who will help obtain a credit certificate from the state for their project. The credits are distributed over a five year period with any unredeemed portion able to be carried forward indefinitely or transferred to a new owner or tenant.
Projects can qualify for credits under six different program components:
- Whole Building Credit (owner or tenant), where base building and all tenant space are green;
- Base Building Credit (owner), for non-dwelling spaces;
- Tenant Space Credit (owner or tenant), where the base building must be green to qualify if the tenant space is under 10,000 square feet;
- Fuel Cell Credit, for systems fueled by a "qualifying alternate energy source;"
- Photovoltaic Module Credit; and
- Green Refrigerant Credit, for new air conditioning equipment using an EPA-approved non-ozone depleting refrigerant.
The components 4, 5 and 6 above must serve green spaces. For example, to qualify for the PV Module Credit, the building which the system serves must meet all requirements for energy, indoor air quality, materials, water conservation and commissioning. Credit cannot be earned simply by placing a PV system, for example, on a building.
The New York Department of Environmental Conservation must update the tax credit regulations (6NYCRR Part 638) before applications can be accepted for the $25 million allocated for Period two. Visit the program web site above for announcements regarding updated regulations. |
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