Westchester County may not be synonymous with solar power quite yet, but there may not be a better place in the country for homeowners to consider going solar. With Con Edison, Westchester County homeowners have gotten used to paying a lot for their electricity. What they may not be used to is having an alternative to lower those costs.
We’re happy to tell you there is another way. Between the state of New York and a solar rebate program for Westchester County homeowners in Con Edison’s coverage area, the incentives make going solar incredibly easy. We’ll have to dive a little deeper to understand just what to expect when you’re looking to go solar in Westchester County.The Federal Solar Tax Credit
The Federal Investment Tax Credit (ITC) is available to everyone in the country who purchases a solar system. As it stands, the tax credit has no cap and will reduce your system cost by 30%. For instance, if your system costs $20,000 before the tax credit, your system cost would be reduced by 30%, or $6,000, bringing your net system cost to $14,000.
To take the tax credit, you have to have a tax liability greater to or equal to 30% of your system cost. In other words, you can’t claim the full tax credit if you don’t pay at least that much in federal taxes. There are however, great alternatives. The federal solar tax credit can be rolled over for up to 5 years which means you really only need one fifth of the tax liability. If you are retired or currently don’t have any income, a lease becomes a great option as well where you still receive all the incentive benefits. Another caveat to this tax credit is that you must purchase your system, either with a cash purchase or a loan. If you go with a lease or a PPA (Power Purchase Agreement), the installer will be the one taking the tax credit.
In 2020, the tax credit will step down to 26%. In 2021, it will step down again to 22%. At the moment, there are no plans for an extension after that. Of course, that can all change with new legislation, but there are no signs of that as thing stands. Given that this is a huge incentive in the solar industry, if you’re considering going solar, there’s no reason to delay and risk missing out on the huge discount the federal government is offering. If you’d like to read up on this incentive, you can see the full program details here.
In addition to the federal tax credit, New York State offers a tax credit of its own. The solar tax credit is for 25% off the cost of your system with a cap of $5,000. Since you can claim both these tax credits together, there is a potential to have your system cost reduced by 55% if you don’t meet the state cap.
So, if your system cost $20,000 before the tax credit, the price would be reduced by 25%, or $5,000, bringing your net system cost to $15,000. Now if your system cost $30,000, you would reach the cap since 25% of $30,000 is $7,500. Therefore, your net system cost would be reduced by the cap of $5,000 to $25,000.
Unlike the Federal ITC, you can claim the New York solar tax credit regardless of how you finance the system. So if you buy the system outright with cash, choose to go with a loan, or sign up for a lease or PPA, you’ll be able to take the 25% tax credit (up to the $5,000 cap of course). As it stands now, there is no expiration on the state tax credit. If you’d like to read more about the New York State tax credit, you can see the full program details here.
Starting in 2014, NYSERDA (New York State Energy Research and Development Authority) began offering solar rebates to customers in certain utilities and regions across New York. As luck would have it for Westchester residents, the rebates in Con Edison’s coverage area are still active.
The rebate is allocated in sequential segments, called blocks. Every block has a certain amount of installed kWs that can receive the rebate before it is considered full. Once a block is full, the rebate steps down to the next block. Right now, Con Edison is in the 7th of its 9 blocks.
The rebate in the 7th block is $.40/W. The rebate drops by $.10/W in the 8th and 9th blocks, stepping down to $.30/W and $.20/W, respectively. Now, that may not seem like a substantial difference since we’re talking about the rebate in cents, but for a 10kW system, the step down is $1,000 to each block.
We’ll dive into how this affects the total cost of your system in just a bit, but you can clearly see the value of taking advantage of this rebate sooner rather than later. To see real-time information and status updates on the blocks, you can visit the NYSERDA website here.Breaking Down the Cost to Go Solar With Every Available Incentive
Now that you understand all the great incentives available to you let’s break down the cost of going solar in Westchester County. To be comprehensive, we’ll look at the cost and savings of both an average and large electric bill. We’ll also see what the prices should be like for standard equipment and what it should look like for premium brands, such as LG.
In Westchester County, the average Con Edison bill is around $120. We’ll also look at a larger utility bill for homes that use a decent amount of electricity, which is around $225 in Con Edison. To break down the cost of solar, we’ll start with the gross system cost. The gross system cost is the cost of your solar system before any incentives are applied.
Gross System Cost
We know those numbers look daunting, but remember, we haven’t applied any of these great incentives yet. The first incentive we’ll apply are the NYSERDA rebates. As with nearly all solar rebates, the NYSERDA rebates have to be applied to the gross cost before the tax credits can be applied.
System Cost With NYSERDA Rebate
Now we’re starting to see some savings. The rebate we’ve used here is from the 7th block of the NYSERDA rebates. Remember, as time goes on and that block fills up, that rebate amount will be reduced. Now that we have applied the rebate to the system costs, we get to apply the federal and New York state tax credits. Since both of these credits come off the total cost and not one after the other, you’re going to see some stellar savings.
System Cost with State and Federal Tax Credits
This is where we see the massive savings. It’s abundantly clear that the solar incentives for homeowners in Westchester County are phenomenal. Every single option here sees a reduction of over 50% of the total system cost. If you’re purchasing with cash, that is a fantastic discount that will lead to a very quick ROI. If you want to pay with a loan, you’ll be able to pay nothing out of pocket and save money on your monthly energy payment from the very first day. Let’s take a look how those numbers break down with a 15-year loan.
Monthly Savings with a 15-Year Loan
Just to make this abundantly clear, this is the amount of money you would save on your very first payment after you go solar, having paid nothing up front. Most homeowners choose to pay with a loan for this very reason. Instead of paying your utility company and watching those rates go up over time, you’re able to save money on your monthly payments from the very start, protect yourself from rate hikes, and add value to your home.
The monthly savings are just the start of the savings. As you’d imagine, those savings add up over time. Once your loan is paid off, you won’t pay anything for your electricity and your savings will skyrocket.
Approximate Lifetime Savings
As you can see, the savings from going solar in Westchester County are hard to ignore. In fact, they’re actually quite staggering, even for us to see. That’s not hyperbole. We service over 30 states and we rarely see lifetime saving this high. The combination of high electricity prices and some of the best incentives in the nation create a perfect storm for these lifetime savings.
There are a couple of things that are important to understand when it comes to figuring out your lifetime savings. First, lifetime savings are based of the warranty of the solar panels, which is 25 years. In short, your system is guaranteed to produce energy for you for 25 years, so your savings will accrue for at least 25 years. Second, utility prices tend to rise between 2-4% every year, so what you pay for electricity from the grid now will be much less than what you’ll pay in 5 or 10 or 25 years. With those factors accounted for, we’re able to figure out what you’ll save over the lifetime of your solar system.
We do have to mention that there are a lot of factors that can make the cost and savings go up and down here. The orientation of your solar system, if your house has significant shade, degradation of panels, and many other factors can change how these numbers may look. These numbers are accurate, but they are also an estimation. We’re well versed in not only these policies and incentives, but how to design a solar system to fit your specific needs.
It's Time To Go Solar Westchester County
In the end, going solar in Westchester County is a no-brainer if you have the adequate roof space. On top of the federal tax credit, the New York state tax credit and NYSERDA rebate make solar very attractive for Westchester County homeowners. If you are considering solar, the time is now. The NYSERDA rebates will step down and your savings will be decreased over time. We want to help you maximize your savings and make solar the norm in Westchester County.
At Pick My Solar our goal is to make going solar as easy as possible for the homeowner. If you have any more questions or specific concerns/inquires about your home, we encourage you to speak to one of our solar educators. We can be reached at (888) 454-9979, or if you would like to schedule a call, you can click here.
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