Solar Power users in New York can knock off up to $5000 in personal taxes if they are using solar power systems for residential heating, cooling, hot water or electricity. The New York State Energy Research and Development Authority (NYSERDA) also offers rebates to photovoltaic installers.

The credit, equal to 25% percent of the cost of equipment and installation, was expanded in August 2005 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. The credit is non-refundable, but maybe carried over for a maximum of five years.

A solar energy system is any arrangement or combination of components that utilizes solar radiation installed in residences that provides energy for cooling, heating, hot water or electricity. However, the credit may not be used for heating pools or any other recreation applications.

Systems must comply with the 10 kW capacity limit on residential, net-metered solar-energy systems. Legislation was passed in 2007 increasing the capacity limit to 50 kW for condominiums and cooperative housing associations. Members of condominium management associations and tenant stockholders of cooperative housing associations are now allowed to claim a proportionate share of the total system expense towards the tax credit. These changes took effect beginning in the 2007 tax year, but as with other portions of the tax credit, they do not have an expiration date.

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 base load capacity of 25 kW and must utilize proton exchange membrane (PEM) technology.

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