NYC Non-Residential & Commercial Solar Incentives: The Definitive Guide

Over the past ten years, states and major metropolitan areas across the United States have funnelled money into various clean energy plans. New York City is no different.

Between the high federal tax credits, progressive state incentives, and unique NYC-specific programs, NYC has emerged as a near-unparalleled economic opportunity for savvy developers and building owners. With 11,000+ solar projects and counting since 2017, and 1,808 projects still in progress, the city has taken an enormous leap into the future of clean energy.

The opportunity to monetize unused roof space in NYC is there, but the suite of incentives and who can take advantage of them can be confusing. We have simplified the list for you, broken down into two tiers: one for those interested in putting up all upfront capital, and the second for those who have the available roof space but no capital.

Tier 1: Full Investment Incentives

Given current incentives and UrbnDER's competitive dollar-per-watt installation costs, non-residential solar boasts an investment rate of return of 10-20% and a 3-5 year payback. Below are the incentives associated with such returns:

  • Federal ITC (Investment Tax Credit): Under current legislation, building owners who choose to install solar projects can receive 30% of the projects’ total cost as a federal tax credit. However, starting in just six months (December 31st, 2019) that number will dip to 26%. Twelve months after that, it’ll drop to 22%, and a year after that, to 10%.

  • NYSERDA NY-Sun Grant: NYSERDA grants directly offset the up-front cost of the solar system. These are allocated in blocks by region. While most NYS regions have claimed their block allocations, NYC has 30MW of capacity in the $.60/watt subsidy, which we expect to be filled by the end of the year, dropping the subsidy to $.50/watt.

  • Modified Accelerated Cost Recovery System (MACRS): Through this program, the building owners’ cost of investment can be recovered over a period of five years following the installation, as the solar system depreciates in value according to an accelerated schedule.

  • Property Tax Abatement (PTA): This incentive allows for building owners to receive 5% of the cost of the system (up to $62,500) per year for four years (a maximum total of $250,000). This is delivered in the form of a decrease on owed property taxes.

  • Property Tax Exemption: In most cases, after a building installs an upgrade that drastically increases its value, the property taxes for the building will change following an assessment. This incentive ensures that the value of the building will not increase, and neither will the owed property taxes.

  • Sales Tax Exemption: This exemption prevents the sale and maintenance of any installed solar systems from being subject to the state sales tax.

  • VDER Community Credit: The Community Credit was introduced at the beginning of 2019 as a way to encourage participation in community solar projects. In this case, it allows for all energy produced by a community solar system to be sold at a higher rate, significantly increasing the value of the system.

Roof Improvements: While not technically an incentive, roof improvements can be folded into the cost of the solar system, which proportionally increases all incentives, considerably reducing the cost of the roof replacement (by roughly 50%).

Tier 2: Zero-Investment Benefits

If you do not have the up-front capital, some solar companies have crafted creative solutions where they take on the investment and pass benefits to you. UrbnDER’s unique no-risk installation option is one of the simplest and most lucrative options available. In simply provide us with your available roof space, and in exchange you receive:

  • Property Tax Abatement: Regardless of whether you own the solar system or not, if you own the building it is installed on then you receive the annual property tax abatement (5% of the system cost per year, up to $250,000 total over 4 years).

  • Annual Lease Payments: In UrbnDER’s case, we operate as a tenant for your unused roof space. In exchange for you allowing the installation and operation of the system, we pay an annual lease for the entirety of a 20-year lease agreement. And, for the duration of that lease, we handle all maintenance and operation issues.

  • Free Roof Replacement: UrbnDER can fold in the cost of roof improvements to our overall investment, at no cost to you.

UrbnDER, due to its flexible financing options, is uniquely positioned to assist building owners in identifying passive income opportunities available via solar.
Are you eligible and interested? We’d be happy to evaluate your building, or simply field your questions and concerns.

Sources:

https://www.seia.org/initiatives/solar-investment-tax-credit-itc

https://nysolarmap.com/

https://www.irs.gov/publications/p946#idm140519620438784

https://www.nyserda.ny.gov/All%20Programs/Programs/NY%20Sun/Contractors/Value%20of%20Distributed%20Energy%20Resources