Summary

This legislation amends the tax law tax to increase the residential solar tax credit cap from $5,000 to $10,000 and converting the amount of the credit that exceeds a taxpayer’s liability into a refund for low to moderate income taxpayers and households located in disadvantaged communities.

Explanation

New York State has a long history encouraging residential adoption of solar generation, through combinations of utility tariffs, NYSERDA funding, and tax credits. These incentives help to eliminate the cost barriers for many New York households interested in installing solar at their homes. However, not all New Yorkers can leverage the tax system to their advantage. Tax credits deliver little to no direct benefit to the lower income and environmental justice communities that are disproportionately burdened by the impacts of climate change and fossil fuel derived pollution. This legislation addresses this disparity by increasing the tax credit cap from $5,000 to $10,000 and converting the amount of the credit that exceeds a taxpayer’s liability into a refund for low to moderate income taxpayers and households located in disadvantaged communities.

Expanding access to solar tax benefits is in line with the state’s responsibility to address the equity mandates of the Climate Leadership and Community Protection Act (CLCPA). This action presents an opportunity to serve New Yorkers that do not currently have equitable access to state incentives, providing communities on the front lines of climate change with new, and needed, opportunities to tap into the economic and health benefits solar energy systems provide.

It is important that existing policies continue to be adjusted to help the State meet the climate, clean energy, and equity goals dictated by the CLCPA which requires the state to transition to an emissions-free electric grid by 2040 and achieve an 85% reduction in greenhouse gas emissions (GHG) by 2050. A core component of the climate law is the requirement that no less than 35-40% of climate and clean energy funds benefit disadvantaged communities. Equitable access to these longstanding tax benefits will provide another tool to help meet this mandate, delivering GHG emission and co-pollutant reductions to the communities that have been hit hardest by fossil fuel-derived pollution.

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