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Solar Energy System Equipment Tax Credit Support Memo

March 14, 2022

New York Solar Energy Industries Association (NYSEIA) strongly supports S.8009-B Part HH to enhance the Solar Energy System Equipment Tax Credit and make it more equitable for all New Yorkers.

This bill would increase the maximum tax credit amount to $10,000 while maintaining the 25% system cost limit; include paired energy storage equipment as eligible systems; update unnecessarily restrictive language regarding cooperatives and condominiums; and remove the requirement that only primary residences are eligible while maintaining the one credit per taxpayer limit. NYSEIA also strongly supports a provision be added to eliminate the carryover limit and make the solar tax credit refundable for low-to-moderate income residents.

Increasing the maximum amount of the solar tax credit is necessary to accommodate increased State solar targets in light of increasing labor costs and competing market dynamics. Also, energy storage will be a critical component of a 100% zero-carbon electric grid and including it in the solar tax credit is a concrete step to help incentivize solar systems be paired with energy storage systems, providing significant resiliency benefits for New York’s electrical grid.

Making the solar tax credit refundable for low-to-moderate income New Yorkers and eliminating the carryover limit will increase equitable access to solar. Without these provisions, the credit is less effective for residents with limited tax liability, reducing the value proposition and serving as a structural barrier to solar energy. Furthermore, cooperatives and condominiums, along with second homeowners whose primary residence is not amenable to solar development, are currently subject to antiquated limitations. Removing these barriers and increasing availability to the solar tax credit will help more New York residents join in the clean energy transition.

New York needs a robust distributed solar industry to meet the goals of the Climate Leadership and Community protection Act (CLCPA). With costs on the rise for equipment and labor, and the Customer Benefit Contribution charge now in effect, the value proposition is shrinking for new solar customers. The solar tax credit should be updated to account for these inflationary headwinds and to make the benefits of solar energy more equitable and accessible. Doing so would help maintain our momentum and leadership in the movement to a cleaner and more advanced electrical grid and keep solar industry jobs growing in New York.

For the above reasons, NYSEIA supports S.8009-B (Part HH) and urges its passage.

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