Incentives for More Sustainable and Greener Businesses - New York
New York has several tax and financial incentives for small businesses becoming more sustainable in the state. Some include the NY Solar Sales Tax Exemption, Property Tax Abatement for PV, Energy Conservation Improvements Property Tax Exemption, the NY-Sun Incentive Program, and Energize NY.
New York Solar Sales Tax Exemption
- Since 2005, the state of New York has exempted the sales and compensating use tax on the retail use and installation of commercial solar energy materials.
- These commercial solar energy systems are exempt from New York's 4% sales and use tax and the 3/8% sales and used tax imposed in some districts.
- The exemption also applies to commercial solar energy systems and solar energy systems owned by third parties. Solar lease payments and receipts showing the sale of electricity by these solar energy equipment are exempt from the state sales and use tax.
- This exemption may be extended to local sales and use tax in New York municipalities and counties with a population of more than 1 million. The government in these counties may decide whether the exemption applies to local taxes.
- The sales tax exemption does not apply to recreational applications like solar pool heating.
Property Tax Abatement for Photovoltaic (PV) and Energy Storage Equipment
- For commercial building owners installing solar photovoltaic systems for electricity, the state offers property tax abatement incentives.
- The program enables property owners to deduct 5% of the solar installation cost annually, for four consecutive years, from property tax bills amounting to $62,500.
- The deduction rate depends on when the solar system was installed. If it was installed earlier than 2018, the rate could be between 2.5% to 8.75%. The program ends in 2021.
Energy Conservation Improvements Property Tax Exemption
- Under this program, businesses may be exempt from real property taxes for some energy systems, such as fuel cell electric generating systems, solar energy systems, and micro-hydroelectric energy systems.
- The tax exemption lasts for up to fifteen years from the date the energy equipment was installed.
- To qualify for the exemption, "electric energy storage equipment must have started construction after January 1, 2018, and before January 1, 2025. The exemption applies to the increase in value of the real property due to the addition of the energy equipment."
NY-Sun Incentive Program
- For small businesses in New York, this program offers financial incentives and financing to alleviate the cost of buying and installing a solar system.
- The program was launched with the goal of supporting 6 GW of installed capacity by 2025.
- The program has different megawatt budgets that vary by region. The block incentives are set based on installed cost per watt, historical demand, and equity, on a regional basis.
- The incentives "available within each MW Block are scheduled to step down over time as certain targets are met."
- Small businesses need to partner with a participating contractor to be certain they are eligible for the incentive.
- New York-based small businesses are offered a maximum incentive of 750 kW. Incentive rates vary from $0.45/W to $0.60/W based on the region.
- Also known as Property Assessed Clean Energy (PACE) financing, Energize NY offers commercial and nonprofit property owners financing for renewable energy projects and deep energy upgrades.
- The program allows these property owners to pay back the "cost of clean energy upgrades through a special charge on their property tax bill."
- Program participants must have renewable energy projects in a NY municipality that is a member of the Energy Improvement Corporation (EIC).
- The financing amount ranges from $5,000 to $2,500,000. It is limited to "10% of the appraised value of the property, or the cost of energy improvements, whichever is lower."
- Its interest rate ranges from 5% to 7% depending on the term length. Term lengths are typically 5 to 15 years.
NYSEG (Electric) - Commercial and Industrial Efficiency Program
- Prescriptive rebates and custom incentives are offered to non-residential NY customers that have installed energy efficient equipment with an electricity Systems Benefits Charge (SBC) included in their energy bills.
- All nonresidential NYSEG or RG&E electricity customers are eligible. Custom incentives are "available when energy efficiency improvements require site-specific engineering and cost analysis."
- The incentive amount varies by equipment. For example, for LED lighting, it is $4 to $10 per lamp for replacement tubes. For HVAC, it is $50 to $100/ton.