NY SOLAR INCENTIVES & FINANCING
The Dollars & Cents of Going Solar

Solar Costs
For most people, deciding that they’d like to go solar isn’t difficult—but answering two important questions is:

There are a variety of ways to reduce the out-of-pocket contribution and finance the cash required. Below we explain available NY solar incentives and financing options, and apply each to a real-life example:

NY Solar Incentives & Financing

How Much Will It Cost?

By taking advantage of government incentives and tax credits a solar power plant for your home is a solid financial investment. Payback periods are short, return on investment high and you fix your energy costs well into the future. There are three levels to these as follows:

  1. NY-SUN Solar PV Rebate or Incentive ($0.35/W)   
  2. Federal Tax Credit (26%)   
  3. NYS Tax Credit (25% up to $5,000%)  

Credits & Incentives: Example

Here’s how the federal and NY solar incentives and tax credits play out using the example above:

System Cost $19,950
NY-SUN Solar PV Rebate ($0.35/W)
Like cash off; goes directly to system builder upon completion.
-$2,240
Contract Cost $17,710
26% Federal Tax Credit
Based on contract cost ($17,710
+ x .26); deduction from federal tax bill for year paid
-$4,605
25% NYS tax credit ($5,000 maximum)
Based on contract cost ($17,710 x .25); deduction from state tax bill for year paid
-$4,428
Effective Total Cost $8,678
System Cost $19,950
NY-SUN Solar PV Rebate ($0.35/W)
Like cash off; goes directly to system builder upon completion.
-$2,240
Contract Cost $17,710
26% Federal Tax Credit
Based on contract cost ($17,710
+ x .26); deduction from federal tax bill for year paid
-$4,605
25% NYS tax credit ($5,000 maximum)
Based on contract cost ($17,710 x .25); deduction from state tax bill for year paid
-$4,428
Effective Total Cost $8,678

 

How Will I Pay for It?

Installing a solar array is a smart investment—but it must make sense financially for your family. It’s possible to lease a system with no money down, but it’s not advised. These financing options are far more advantageous:

 

  • Home Equity Line of Credit (2.49% – 4.49%) Secured loan typically provides the lowest interest rates. Can cover full contract cost, including state and federal taxes for zero money out of pocket
  • NYSERDA Smart Energy Loan (Currently 0%) Temporary promotional offer, available until May 31st 2021. 15 year loan can cover up to $25,000 of total system cost.
  • Sungage Financial Loan (0% on Tax Credit portion, 4.99% – 6.99% on remainder, depending on terms.) 5, 10 ,15 and 20 year terms available. Includes 12 month same as cash bridge loan for tax credits. Most convenient financing platform with

Considering Leasing? Read this first »

Financing Options: Example

Here’s how these options break down using the example above:

Option #1: HELOC Option #2: NYSERDA Option #3: Sungage Financial
Contract cost: $17,710 Contract cost: $17,710 Contract cost: $17,710
     HELOC loan: -$17,710
10 year loan @ 2.99%
Smart Energy loan: -$12,850
15 year loan @ 0%
Sungage Financial loan: -$17,710
20 year loan @ 6.99%
Total out of pocket: $0 Total out of pocket: $4,860 Total out of pocket: $0
Monthly Cost: $170.93 Monthly Cost: $72.00 Monthly Cost: $68.00
Option #1: HELOC Option #2: NYSERDA Option #3: Sungage Financial
Contract cost: $17,710 Contract cost: $17,710 Contract cost: $17,710
HELOC loan: -$17,710
10 year loan @ 2.99%
Smart Energy loan: -$12,850
15 year loan @ 0%
Sungage Financial loan: -$17,710
20 year loan @ 6.99%
Total out of pocket: $0 Total out of pocket: $4,860 Total out of pocket: $0
Monthly Cost: $170.93 Monthly Cost: $72.00 Monthly Cost: $68.00

 

 

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NYS Solar Tax Credits

What NYS Solar Tax Credits and Incentives Are Available Now?

NYS Solar Tax Credits

By taking advantage of government incentives and tax credits a solar power plant for your home is a solid financial investment. Payback periods are short, return on investment high and you fix your energy costs well into the future. There are three levels to these as follows:

  1. NY-SUN Solar PV Rebate or Incentive ($0.35 / W)
  2. Federal Tax Credit (30%)
  3. NYS Tax Credit (25% up to $5,000)

Would You Lead Me Through the Specifics?

NY-SUN Solar PV Rebate:

  1. This funding is as good as cash and goes to the system builder (Geotherm, Inc.) upon completion of the project.
  2. The $0.35 / W means it is based on the DC output of the array. In this case it is 6,400W (6.4 KW) DC  so multiply that by $0.35 to get $2,240.
  3. An important point here is that this NY-SUN funding is decreasing in increments of $0.05 / W, so the next drop will be to $0.30 / W. For this project it would drop to only $1,920, a decrease of $320, so there is some time pressure on this.

26% Federal Tax Credit:

  1. This is based on your Contract Cost of $17,710, so multiply that by 0.26 to obtain the $4,605.
  2. This is a direct bottom-line deduction from your federal tax bill for the year when you paid for your solar system.
  3. In other words, you don’t have to pull $4,605 out of your pocket to pay your federal taxes, or the government pays you back for the loan you floated the government.
  4. There are a couple of forward thinking cash flow management strategies that can be leveraged here as follows:
    – Employees: Significantly increase your deductions to pay less tax during the year of your solar install.
    – Self-Employed: Stop paying taxes now. I have an S-Corp. I pay myself first and the government last. Works for me.
  5. This credit will fall to 22% in 2021 and 10% in 2022.

25% NYS Tax Credit:

  1. Same points here as 1-4 above, only this time relative to NYS
  2. This is based on your Contract Cost of $17,710, so multiply that by 0.25 to obtain the $4,428.
  3. The maximum NYS Tax Credit is limited to $5,000
  4. This NYS Tax Credit will continue on.

What’s “The Bottom Line” from all this?

It’s a short payback period and excellent return on your investment, in this specific case, as follows:

25 Year Investment Benefits (Warranty Period)
Cash Payback (Years) 9.1
Annual Rate of Return (25 Years) 15.3%
25 Year Investment Benefits (Warranty Period)
Cash Payback (Years) 9.1
Annual Rate of Return (25 Years) 15.3%

And, as we all know, the only certainties in life are death, taxes and that energy costs will increase. How else can you fix your future energy cost to today’s rates, get a 15% Return On Investment, move towards greater levels of self-reliance and make the government pay for most of your system? The other point relative to mutual funds, 401Ks and the market; this investment will never go negative.

 


 

Design Installation, Energy Systems Rochester NY - Solar Financing

Can I Get a Solar System Installed With No Money Down?

Solar Financing Rochester NY

Yes, it is entirely possible to have a solar array installed on your home with no money down. But beware… this should be a wise financial investment that works for your family, not just for the lessor. We’ll explain the liabilities of leasing later. Your far more advantaged financing options are listed below starting with the lowest interest rate:

  1. Home Equity Line of Credit (3.49% – 4.49%)
  2. NYSERDA Smart Energy Loan (Currently: 0% , Normally: 3.49% – 5.99%)
  3. Sungage Financial (0% on Tax Credit Portion, 5.49% – 6.49% on remainder)

How Do They Actually Work?

Home Equity Line of Credit (2.49% – 4.49%)

If you already have a HELOC, or can apply for one quickly now, this is the most straightforward path of all because:

  1. You can use this to cover the full “Contract Cost”
  2. This includes the NYS and Federal Tax Credits
  3. It is truly zero money out of pocket.
  4. Once you receive the tax credit refund you can pay down that much of the loan.
  5. These loans can generally be paid down on an accelerated basis with no penalty.
  6. Using the savings from lower utility bills you can play the loan down on an accelerated basis to enhance your investment return.

NYSERDA – Smart Energy Loan ( Currently 0%)

NYS offers a low interest rate loan that:

  1. Can cover up to $25,000 of the “Total System Cost.”
  2. The amount loaned is tied to the amount of power generated.
  3. There is a qualification process for the NY-Sun Smart Energy Loan.
  4. The interest rate will vary in relation to one’s income so the numbers need to be run to determine the exact interest rate.
  5. You can find your interest rate, loan approval criteria and application link here.

Sungage Financial (0% on Tax Credit Portion, 4.99% – 6.99% on remainder)

If the NYSERDA – Smart Energy Loan doesn’t cover the full “Contract Cost,” this is another option to achieve the zero out of pocket objective. The advantages of Sungage are that:

  1. It includes a loan for the Tax Credit Portion at 0% for 12 months.
  2. Approval is usually quick and seamless.
  3. We absorb the financing fees in the Sungage Gross System Cost so this can be zero out of pocket if desired.

Bottom Line:

Of course any financing negatively impacts your payback period and return on investment. Therefore if the project can be self-funded that is the better option. On the other hand with a payback period of 9.1 years and a return on investment of 15.3% (example used in incentives and tax credit piece) you’ve got a lot of leeway. So it really comes down to how best to leverage available cash flow now to create more positive cash flow in the future!