Signed into law by President Joe Biden on August 16th, the Inflation Reduction Act is a huge win for the planet and the renewable energy industry. Here’s what this landmark climate bill means for the future of clean energy in the U.S.

Background of the 2022 Climate Bill

Climate action was a major component of President Biden and Vice President Kamala Harris’ campaign platform. Originally, the White House wanted to include climate provisions in what was called the Build Back Better Act, but this legislation failed to progress through Congress.

Senate Democrats then set out to pass Build Back Better in pieces, to cover priority issues like healthcare, tax reform, and fighting global warming. Sen. Joe Manchin and Sen. Kyrsten Sinema, the Senate’s two swing votes, presented significant obstacles to passing any reform in these areas. In July, things looked grim for climate action when Sen. Manchin announced that he would not be supporting any new legislation for renewables and climate change. 

But after months of negotiations between Senate Majority Leader Chuck Schumer and Sen. Manchin, the Inflation Reduction Act (IRA) was proposed – a budget package aimed at curbing inflation, reducing healthcare costs, reforming tax code, and investing in clean energy. After an amendment by Sen. Sinema, the bill passed the Senate vote and the House of Representatives’ vote along party lines.

This sweeping budget bill ultimately invests a historic $369 billion in clean energy and fighting climate change.

What is in the new climate bill?

The Inflation Reduction Act of 2022 includes $369 billion in climate-related investments – the largest federal investment in renewable energy in the history of the United States.

The bill will use billions of dollars in tax incentives to boost the adoption of clean energy and energy efficient technologies, with the goal of reducing greenhouse gas emissions by 40% by 2030.

Here’s what’s covered by the new tax incentives.

Clean Energy

The climate package invests billions of dollars into expanding the manufacturing and adoption of renewable energy. It provides production and investment tax credits to ramp up U.S. manufacturing of solar panels, wind turbines, batteries, and electric vehicles. 

The bill also provides tax credits for consumers who invest in clean tech, including rooftop solar! More on this below.

Electric Vehicles

The bill includes a $4,000 tax credit for lower and middle income individuals to purchase used electric cars, and a $7,500 tax credit for new vehicles.

Heat Pumps, Electric Water Heaters, and Other Clean Tech

The package provides tax credits to consumers who add clean technologies to their houses with the goal of helping the American people reduce their energy costs and the use of fossil fuels. These include heat pumps, electric water heaters, and electric HVAC. 

Plus, there will be additional rebates and grants for low-income households and affordable housing to make energy efficient upgrades.

What does this mean for the Federal Solar Income Tax Credit?

We’re excited to say that the Inflation Reduction Act includes an extension and expansion of the Solar Investment Tax Credit! The ITC, or Federal Solar Tax Credit, has been instrumental in the growth of the solar industry since its inception in 2005. 

When it was originally passed in 2005, the federal tax credit covered 30% of the cost of a home solar installation. However, it’s seen a decline over the years: it was at 26% this year, and was set to drop to 22% in 2023 before going away completely in 2024. 

Luckily, this new climate bill has restored the ITC at 30% and extended it for 10 more years. It’s also retroactive, applying to any installation that occurred after December 31, 2021.

This is huge news: any residential solar installation that has taken place in 2022 or takes place over the next decade is now eligible to get 30% of their costs back on their income taxes.

What does this mean for New Yorkers looking to go solar?

The 30% Federal Tax Credit will make it that much easier for homeowners across the country to switch to solar power. But for homeowners in New York City, that’s not all!

New York City is home to some of the richest solar incentive offerings in the country. This means that New Yorkers going solar can now claim the new 30% tax credit on top of the many NY solar incentives provided by the city and state, too. As a result, the average solar installation in NYC could see its costs reduced by up to 70%!

Now’s the Time to Go Solar

Needless to say, it’s an exciting time for solar energy. With the passing of this historic legislation, the federal government is giving clean energy the endorsement that so many activists and industry leaders have been fighting for. Clean energy is the future – join us!

With the new 30% credit available now, we’re expecting to see a huge uptick in demand for solar in NYC.  

Get ahead of the rush and secure your tax credit now. Schedule a free consultation today!

Not only does going solar benefit the planet, it benefits your wallet too. It will drastically reduce your electric bill, and you can take advantage of some of the best solar tax credits in the country as a New Yorker. 

We want to make sure our customers understand the entire solar panel installation process, so that they can get the savings and credit they deserve for switching to clean energy. That’s why we believe it’s important that we let our customers know what to expect, even after the installation. We’re here for you and your new flat roof solar system

Read on for what you can expect in the weeks and months post solar panel installation.

What happens after your solar panels are installed?

The Brooklyn SolarWorks crew has just left your home after completing your solar installation. You might be thinking: what’s next?

The next step in the solar process is receiving final approval from the various entities that issued permits for the installation. This involves inspections and a meter swap, all of which Brooklyn SolarWorks will schedule and facilitate – all you need to do is grant us access to your home on the scheduled dates.

The Department of Buildings requires that each installation is inspected to ensure compliance with building and electrical codes. In this inspection, a representative will check over your installer’s work to make sure, for example, that the panels were mounted securely and that the electrical wiring was done correctly.

A system of electric meters.
Your system will be inspected post solar panel installation. Credit

Once your solar panel system is installed, Con Edison will also pay a visit to your home to do a final inspection and swap out your old meter for a net meter. This device enables net metering to take place, ensuring that you receive the proper credit for the amount of energy your system exports to the grid.

Once Con Edison issues a final acceptance letter, your system will be given permission to operate (PTO). This means the system is registered in their billing system and it’s ready to be activated in your home’s electrical system. This is done by turning on the AC disconnect switch or dedicated solar breaker in your electrical panel. We’ll provide instructions or stop by to assist.

How to Read Your Electric Bill from Your Utility Company

Getting your first ConEd bill after your solar panel installation is an exciting moment. It can be a bit confusing though, because ConEdison does a poor job of explaining their billing and recordkeeping system. 

Below is an example of what your bill will look like after installing solar panels. The following is a quick breakdown of each section on your new bill and what it all means.

After a solar installation, your Con Edison electric bill will include a net metering summary.
This is an example of what your electric bill will look like following your solar installation.

Your Net Meter Summary

This new section lists ConEd’s record of how much energy you’ve bought from them. It also tells you how many credits (if any) you have stored up through their net metering program. 

Your Electricity Usage

If your house required more electricity than your solar array produced in a month, the value will be positive. This is because you bought some extra from the grid to make up the difference.

If your system produced more energy than you needed in a month, the value will be negative because you gave away your excess to the grid.

In other words, this first column should read ‘Your Grid Electricity Use.’ It indicates how much energy from the grid your home used that month.

How to Read Your Net Meter Summary

Cumulative Net Meter Energy Credit

The negative value from the previous column gets stored in this column. ‘Cumulative Net Meter Energy Credit’ is your “bank” of stored up solar credits.

If your grid use in the first column is negative in a given month, that amount will get added to the previous month’s banked amount.

If your grid use is positive, that amount will be withdrawn from your credit bank if you have any.

If your credit bank hits zero, ConEd will charge you for any remaining amount of power. The last column lists this amount as ‘kWh Billed.’

Note: If you get an unusual bill, it’s good to check the reading type. If the most recent reading says ‘Estimated’, ConEd didn’t take a true reading this month. Your bill may be much different than what really happened. They often incorrectly estimate that recently installed systems are not active. In this case, they will take a true reading within a month or two and correct for any overcharges.

Understanding Your Energy Consumption

You may need to do some math in order to get the full picture of your home’s energy consumption. One confusing factor here is that ConEd cannot see how much power your solar system generates. All they can see is how much power you take from or give to the grid.

We’ve created the chart below to show how adding your Sunny Portal production data to your ‘Net Meter Summary’ can give the complete picture of your home’s energy consumption.

A chart showing how to combine Con Ed data with Sunny Portal data to understand your energy use.
Combining your energy use data from both ConEd and Sunny Portal will give you a complete picture of your home’s energy consumption.

For example, if your solar system produced 598 kWh between September 10th and October 9th, but 411 kWh were sent back to the grid, that means your home consumed 187 kWh in that period.

Similarly, if your system produced 498 kWh between February 11th and March 12th, and an additional 157 were brought in from the grid, that means your home consumed a total of 655 kWh. 

Keep this in mind if you need to figure out your home’s true electric consumption for any reason, or if you’re interested in determining your true solar offset percentage for a given month or year (Solar Production divided by Actual Home Usage).

If you have trouble finding your solar production numbers, please let us know and we can direct you to them. Also, feel free to reach out if you believe there are issues with your solar system’s performance.


If you believe there is a problem with your billing, contact ConEd’s Net Metering division at netmetering@coned.com or 212-780-6600. Remember, they cannot see how much energy your system has produced.

Claiming Your Solar Tax Credits

The final step in the solar process is an exciting one: collecting your tax credits! When tax season arrives, there are a few different tax credits your system may be eligible for. We can provide some basic information and resources on these credits, but because we are not financial professionals, be sure to look to an accountant or tax expert for guidance on filing.

For filing purposes, your installation date and signed contract are available in your customer portal.

You May Be Eligible for These Solar Tax Credits:

Learn more about the solar tax incentives available to New Yorkers.

Monitoring Your System with Your Solar Company

When your solar PV system is installed, the solar system’s inverter will be connected to your home’s WiFi. This connection enables your new solar panels’ production data to be collected in your Sunny Portal. This allows you to track your system’s energy production and determine your offset, if you feel so inclined. 

Connecting your system to WiFi also allows us, your solar installer, to monitor your system remotely. As part of our insurance package, we provide all of our customers with 24/7 real-time monitoring in the event that there are any issues with your system at any point in the future.

Enjoy the Many Benefits of Your New Solar System

The use of solar energy is important for a number of reasons, and it’s an exciting moment to finally have your rooftop solar system installed. Once your system is installed, you have access to clean energy produced right in your own home. 

Because switching to solar power is such a meaningful decision, it’s important to us that all of our customers fully understand the solar panel installation process, from contract signing through post solar panel installation. 

Ready to make the switch to solar for your NYC home? Trust an expert. Talk with us today!

NY solar incentives and surging electricity rates make New York City one of the best solar markets in the country. Something we love about our work is informing homeowners about these incredible city, state and federal offerings that make installing solar panels incredibly affordable.

These NYC solar tax credits and rebates can cover up to 70% or more of the gross cost of most residential solar projects, which is a major advantage of installing solar. We’ve broken them down for you here.

Pie chart of NY solar incentives covering 70 percent of installation costs

Disclaimer: Brooklyn SolarWorks are not financial professionals. As much as we’ll always strive to provide our customers with the most accurate information regarding solar tax incentives, we are not tax experts. Please consult your tax advisor for guidance on filing for credits with respect to your specific circumstances.

New York State Solar Income Tax Credit

What is the New York State Solar Income Tax Credit?

One of the best NY solar incentives to take advantage of is the New York State Solar Income Tax Credit. This credit, also known as the NYS Solar Energy System Equipment Credit, allows NYS homeowners to claim 25% of their solar system costs – up to $5,000 – as a credit on their state income taxes. 

This credit, like the federal solar income tax credit, is non-refundable, meaning you cannot use it to increase your refund from the state government. However, if the credit exceeds your tax liability for a single year, the credit can be carried over for up to five tax years.

Eligibility for the New York State Solar Income Tax Credit

You are eligible to claim this credit if:

  • You purchased solar panels or other solar energy equipment for your home
  • The equipment uses solar radiation to produce energy for residential use
  • The solar equipment is installed and used at your primary residence in New York State

How to Claim the New York State Solar Income Tax Credit

To claim this credit, you will need to file Form IT-255 “Claim for Solar Energy System Equipment Credit” with your New York State income taxes. You can get more information and download Form IT-255 here.

NYS solar income tax credit reduces taxes by $5,000

New York State Solar Rebate 

What is the NYS Solar Rebate?

Through the NY-Sun Program, the New York State Energy Research and Development Authority (or NYSERDA) provides cash incentives to build solar in different regions of the state. This incentive is a rebate that reduces the upfront contract price of New York State residential solar projects. 

The rebate for NYC residential projects is currently $.20 per Watt of solar installed. Note that the rebate amount declines over time based on how much solar is installed in each region of the state.

In addition to the rebate, NYSERDA also provides a number of solar panel financing options for New York residents looking to invest in solar for their home.

How to Apply for the NYS Solar Rebate 

This rebate differs from the other NY solar incentives we’ve listed here in that it is paid directly to the installer, then passed on in full to the customer. In order to secure this rebate, or finance your solar installation through this program, you will need to work with a NYSERDA-approved participating installer.

Brooklyn SolarWorks is an approved NYSERDA contractor. Contact us to learn about the rebates and financing options available to you through this program.

New york state NYSERDA solar rebate is 20 cents per watt of solar installed for NYC

New York City Solar Property Tax Abatement 

What is the NYC Solar Property Tax Abatement?

The NYC Property Tax Abatement for solar allows NYC homeowners to claim 20% of solar system costs as a property tax abatement with the NYC Department of Finance. It is divided into annual 5% installments over a four year cycle, not to exceed any one year’s property tax liability.

Be aware: the NYC PTA will only be available for projects installed through 2023.

How to Apply for the NYC Solar Property Tax Abatement

Brooklyn SolarWorks claims the PTA on your behalf during the permitting process. Building permits signed off by March 15th will have their property tax abatements initiated the following July. 

For more information, you can view the DOB’s Form PT4: Property Tax Abatement for Solar Electric Generating System.

NYC property tax abatement reduces property taxes by 20 percent over 4 years

NYS Historic Homeownership Rehabilitation Tax Credit

What is the NYS Historic Homeownership Rehabilitation tax credit?

The New York State Historic Homeowner Tax Credit Program is little known, but very valuable. Through this program, the state is effectively paying eligible homeowners to optimize their homes through improvements like solar power.

The credit covers 20% of qualified rehabilitation costs of owner-occupied historic houses, up to a credit value of $50,000. 

Eligibility for the NYS Historic Homeownership Rehabilitation Credit

Note that not all NYC homes can qualify for this credit. NY State Historic Tax Credits only apply to certain districts in the city as designated by the NYC Landmarks Preservation Commission. Want to know if your home qualifies? Speak with a solar specialist today.

In addition to living in a designated historic community, your solar panels must be installed on the home that you owned and resided in during the specified tax year in order to qualify.

How to Claim the Historic Homeownership Rehabilitation Tax Credit

To claim this credit, you’ll need to file Form IT-237, “Claim for Historic Homeownership Rehabilitation Credit” with your New York State taxes. Because qualification for this credit can be trickier, BSW can provide support in filing for it.

For more information about the NY State Historic Tax Credit, you can view instructions and Form IT-237.

NYS historic homeownership credit for solar reduces income taxes by 20 percent

Net Metering in New York City

Beyond tax incentives, one of the other great benefits of going solar in NYC is net metering in New York. Net metering is a billing mechanism that allows you to store your solar energy as a retail energy credit to be used at a later date.

In other words, your solar system will likely produce more energy than your home needs. That excess energy is sent back into the grid, and Con Edison compensates you for it in the form of retail energy credits that are applied to your future bills. So even though solar battery installations aren’t permitted in NYC yet, you can still utilize the extra solar energy your system produces. 

Because of net metering, many of our customers reduce and even eliminate their monthly electric bills.

Federal Solar Tax Credit

Another great incentive to take advantage of is the solar Investment Tax Credit (ITC), or federal solar income tax credit. The ITC allows homeowners to deduct up to 30% of their solar system installation costs from their federal income tax. If the credit exceeds a taxpayer’s single year tax liability, they can divide the credit over multiple years. 

Federal solar tax credit reduces your federal income taxes by 30% of your solar installation costs

Most recently, the 30% federal tax credit was extended in August 2022 for an additional 10 years. The credit will drop to 26% in 2033, then to 22% for residential installations in 2034.

To claim this credit, you’ll need to fill out IRS Form 5695 for Residential Energy Credits when filing your federal taxes.

It’s Time to Go Solar Now

Allow us to do the math for you: if your project qualifies for all of the incentives listed above, you could see a reduction of up to 85% of your costs. Even if you’re not eligible for all of these, a majority of your costs can still be covered – in addition to the savings you’ll be receiving on each month’s electric bill. And above all, solar systems increase overall NYC property values by approximately 5.4%.

If you’re seriously considering solar for your home, act quickly so that you can yield the full solar incentives while they last. (Plus, we think you deserve the extra bucks for prioritizing your environmental impact.)

Get started today! Contact us to chat about which NY solar incentives you could be eligible for.

start saving with residential solar

With tax season fast approaching, you may be thinking about what tax incentives are available for residential solar. One of the best tax credits to take advantage of right now is the Federal Solar Investment Tax Credit (ITC), otherwise known as the federal solar income tax credit or federal residential energy credit. Here’s what you need to know about how the federal solar tax credit works.

Disclaimer: Brooklyn SolarWorks are not financial professionals. As much as we’ll always strive to provide our customers with the most accurate information regarding solar tax incentives, we are not tax experts. Please consult your tax advisor for guidance on filing for credits with respect to your specific circumstances.

What is the federal solar tax credit?

The federal solar income tax credit allows homeowners to deduct up to 30% of their solar system installation costs from their federal income tax. This is a dollar-for-dollar reduction in the amount of income tax you owe to the federal government. If the credit exceeds a taxpayer’s single year tax liability, they can divide the credit over multiple years. This credit is available for residential and commercial installations, but each has different guidelines.

The solar ITC was established by the federal government in the Energy Policy Act of 2005, and has been instrumental in incentivizing residential solar. In fact, SEIA estimates that the ITC has expanded the solar industry by 10,000 percent. Additionally, a study by SolarReviews.com found that the ITC is the single most important financial incentive for U.S. homeowners to invest in solar. Because of its popularity, it has been extended multiple times over the past 15 years.

Most recently, the 30% federal tax credit was extended in August 2022 for an additional 10 years. The credit will then step down to 26% in 2033, and 22% in 2034.

Is there a difference between the federal solar tax credit and the solar investment tax credit (ITC)?

You may see “federal solar tax credit” and “solar investment tax credit” – or a combination of the two – in different places. “Investment Tax Credit” is the given name of this credit, but some may refer to it as the “federal solar tax credit” in shorthand. The form that you’ll file to claim this credit refers to it as the Residential Energy credit. For all intents and purposes, these are all the same.

How do I know if I’m eligible to claim the federal investment tax credit for solar?

Pay Income Taxes

First and foremost, in order to claim any income tax credit with the federal government, you must be paying income taxes.

Ownership of Solar System

The most important criteria for determining your eligibility for the solar ITC is ownership of the system. You must own your system outright in order to claim this credit. You are not eligible if you lease your solar system or enter into a power purchase agreement.

Installation Location and Timeline

The solar system that you claim should be installed on either your primary or secondary home in the U.S. A “home” is defined by the IRS as “where you lived” during the tax year – this can be a house, houseboat, mobile home, co-op, condo, or other form of housing.

You will file for this credit when you do your taxes for the year your system was installed. For example, if your system is installed in 2022, you will file for the credit when you do your 2022 taxes.

Income Bracket

You may wonder if this credit only applies to a certain income level. It does not! Taxpayers from all tax brackets can claim the ITC on their federal taxes.

Qualifying Expenses

In past iterations of the ITC, there has been some gray area as to what expenses are covered by the credit. However, the IRS currently has a clear definition of qualifying expenses: 

“You may be able to take a credit of 26%* of your costs of qualified solar electric property…Include any labor costs properly allocable to the onsite preparation, assembly, or original installation of the residential energy efficient property and for piping or wiring to interconnect such property to the home.

Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States.”

By this definition, the following expenses are covered:

  • The cost of the system, including panels, racking, inverters, and other equipment
  • Labor costs, including installation and permitting and inspection fees
  • Solar batteries
  • Any applicable sales taxes

Despite a clear definition, there is still some disagreement when it comes to roof replacement costs. Some solar installers may tell you that you can replace your roof in tandem with installing solar panels and claim the roof replacement costs under the ITC. It is our interpretation that roof replacement is not a qualifying expense.

In its definition of qualifying expenses pictured below, the IRS clearly states that “structural components such as a roof’s decking or rafters that serve only a roofing or structural function” do not qualify for the credit. You can find the highlighted section of the tax code here.

Roof replacement is not a qualifying expense under the federal solar tax credit.

*This quote was taken from the 2021 tax code, when the tax credit only accounted for 26% of installation costs. As of August 2022, it was boosted to 30%.

When can I claim the solar tax credit?

You are eligible to claim the federal solar tax credit for the year in which your system was installed. If your system is installed in 2022, you’ll claim the credit when filing your 2022 taxes. If you do not have enough tax liability to use the credit in just one year, you can divide the credit over multiple years.

How much is the solar tax credit?

The federal solar tax credit covers 30% of your installation costs. In 2033, the credit will drop to 26% and then 22% in 2034.

How to Claim the Federal Solar Tax Credit

To claim this credit, you’ll need to file IRS Form 5695 for Residential Energy Credits in addition to Form 1040 and any others applicable to your situation. This form calculates tax credits for a variety of energy efficient home improvements, including residential renewable energy. 

There are essentially three main steps to take when filing for the federal solar tax credit:

  1. Determine your total tax liability for the year. This will tell you whether or not you can use the entire credit in one year or if you’ll be able to carry it forward.
  2. Complete Form 5695, following the instructions to calculate your tax credit amount. Completion of this form will also tell you how much of the credit you’ll be able to carryover if applicable.
  3. Add the result of Form 5695 to Schedule 3 of your Form 1040.

Though we strive to provide the most accurate tax information to the best of our knowledge, we are not tax experts. Please consult your tax advisor for more guidance on filing for the ITC.

Using the Federal Solar Tax Credit with Other Incentives

Along with the ITC, there are several New York State solar incentives available. In addition to the federal solar tax credit, NYC solar customers can file for the following state and city solar credits and rebates:

  • NYC Property Tax Abatement
  • New York State Solar Income Tax Credit
  • New York State Solar Rebate
  • NYS Historic Homeownership Rehabilitation Tax Credit (dependent upon your neighborhood)

When combined with the ITC, these incentives can cover up to 70 percent of the cost of your solar system.

Other Federal Solar Tax Credit FAQs

Can I claim the federal solar tax credit more than once?

Yes. If your total tax liability from the initial year you filed for the ITC was less than the credit amount, you can claim any carryover credits the following year. The credit can be used over multiple years depending on your tax liability.

Is the solar tax credit refundable?

No, the ITC is a nonrefundable credit. If the credit exceeds your tax liability for the year, the difference won’t be added to your tax refund. Instead, you can use the excess credit amount on the following year’s income taxes.

Can I claim the solar tax credit on a rental property?

Generally, no. The residential solar ITC applies to the home that you live in. 

If you live in your rental property for a portion of the year, you can claim the credit – but you will have to reduce the credit amount to reflect the amount of time you lived there. For example, if you lived in your rental property for three months, you can claim 25% of the credit (to reflect the 25% of the year that you lived there).

Is the federal solar tax credit expiring?

The credit will be available until at least 2034. In August 2022, the federal government extended the 30% credit for 10 years, after which the credit will begin to step down. In 2033, it will be 26%, then 22% in 2034.

The Federal Solar Tax Credit for Homeowners in New York City

The federal solar tax credit is just one of several excellent financial incentives available to New Yorkers. When combined with state and local tax incentives and rebates, up to 70 percent of the cost of your solar system is covered. Like any home improvement project, solar is a big investment – but unlike an addition to your house, for example, the financial benefits of solar are available to you almost immediately.

Though the initial price tag may seem out of reach, a solar installation in NYC is more affordable than you think.

If you’ve been considering solar, now is the time to flip the switch. Take advantage of solar tax incentives at their peak – schedule a free consultation to get started today.