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Long Island, New York Solar Power for Your Home – Leases, Loans, Rebates, and Incentives

Long Islanders from Queens to Montauk, lend us your ears (well, eyes, since you have to read)! You may have noticed solar panels going up all over the place, from small businesses to your neighbors’ houses, and wondered “could that work for me?” Isn’t it too expensive?

Well, we’re here to tell you “YES, it can work for you,” and “NO, it’s not too expensive!” New York has so many great programs that solar can work for almost anybody. There are so many great rebates, tax exemptions and credits that you can go solar for $0-down with a Solar Loan, or a lease, or you can pay for the system up front to maximize your monetary returns.

The reason solar is such a great deal on Long Island is because electricity is super expensive! PSE&G Long Island currently charges about $.20 per kWh for electricity, and that adds up fast. Even a small home can see bills upwards of $160/month. Solar cuts your electricity bill by a ton. Your system will save you around $85 a month, and you can lease it for about $72 a month. And you can save even more if you choose one of New York’s great solar loan options!

Now, because there are so many ways to pay for solar, it can seem confusing, so we’ll break it down for you below in a handy guide to paying for solar on Long Island. Let’s take a look the options and what they mean for you, financially speaking:

Lifetime Return For 4 Different Methods of Going Solar on Long Island, NY

The chart above shows the money you can make over the 25-year life of a solar panel system on Long Island, based on how you choose to pay for it. The options include a standard $0-down lease, two different methods of paying off a solar loan, and an outright, money-on-the-table purchase of a system.

The chart shows that buying a system outright will make you the most money in the long term, which might seem like the best option. But looks are a bit deceiving here. The Purchase option requires you to put a lot of money up front, so it actually doesn’t represent the best return on your investment.

Here’s some info about how each option could work for you:

 Option 1: Solar Lease

Solar leases can be really great for people who don’t qualify for a tax break or who want to incur less risk (with less reward). Here are some of the advantages of a solar lease in New York:

  • No money down
  • A monthly payment that rises by a smaller increment than electricity prices do
  • The lease is transferable if you decide to sell your house.
  • You just have to find an installer, sign on the dotted line, and then save money
  • The installer takes care of everything, including maintenance and repair

With a lease, you sign an agreement to pay a low monthly price for 20 years. The panels go up on your roof and you get all the electricity they provide, which reduces your electric bill by just about the same as your lease payment. Over time, your payment rises by a small amount (usually 2.5%), while the cost of electricity goes up by about 3.5% per year. In the last year of the lease, you’ll be saving about $580 on electricity, just for having a roof!

Here’s the other major benefit of a lease: the installation company actually owns the system, and they do all the maintenance and repairs as needed. That takes away a ton of responsibility for you, the homeowner. All you have to do is get quotes from installers in your area, sign up for the leasing program through them, and get solar for no money down! You can sign a 20-year agreement with a fixed monthly payment that will guarantee your savings long into the future. Talk about a sweet deal!

 Option 2: Smart Energy Loan with Lump-Sum Payment

This is one of the best options if you’d like to see major savings from solar and own the panels yourself. You don’t need to have tons of cash right now, because New York has a special solar loan called a “Smart Energy Loan.” You can get up to $25,000 at 3.49% interest, and you’ll sign up to pay it back over 15 years. In our example, your loan amount will be $21,500, the cost of a system minus a $1,000 New York rebate.

Here’s the important part: Because you “purchased” the solar panels (with the loan money), you’ll get the federal government’s 30% Energy Investment Tax Credit (ITC), AND the New York 25% ($5,000) tax credit. That means $11,450 in direct tax relief. This is important: PAY THE LOAN DOWN BY THAT AMOUNT. It will save you thousands in interest and reduce your payment timeframe from 15 years to less than 7. It makes your investment’s rate of return a tremendous 15.8%, which is almost double the return of an investment in the stock market, and less risky.

The first step is to get quotes from local expert installers in New York. Then, talk to them about the Smart Energy Loan option. 3.49% is an insanely low interest rate, and New York is offering it because they recognize the value of solar energy generated by citizens!

Getting a loan means you can get solar panels now and pay them off over the long-term. It will mean that your initial loan payments are a bit higher than your energy bill savings—about $68 per month. But as electric rates rise and you get closer to paying off the loan, you’ll start to see savings.

Here’s how the numbers work for a Smart Energy Loan with lump-sum repayment on Long Island:

  • Installing a typical 5-kW solar system should start at about $22,500. Don’t worry, you’ll be able to take a loan and pay it off quickly.
  • New York has a state rebate of $200 per kilowatt of panels. That reduces your out-of-pocket cost to $21,500. That will be your loan amount.
  • The payments on a $21,600 loan with 3.49% interest over 15 years will be just about $154 per month, but you’ll be saving $85 per month on electricity. Essentially, you’ll pay $69 per month for the privilege of one day owning those panels.
  • Here’s that important part again: There’s a Federal 30% tax credit and a New York 25% tax credit based on the cost of your system. That’s $11,450. Pay the loan down by that amount! You can take the credits over two years if you don’t owe that much in taxes this year.
  • With your loan paid off in year 7, you’ll start making a big yearly profit, and every year after for the 25-year life of your system.
  • Your total profit in 25 years will be over $25,000! The rate of return on your investment will be 15.8% That’s much better than investing in an S&P 500 index fund.
  • And don’t forget… your home’s value just increased by more than $20,000, too (your expected annual electricity savings over 20 years), and thanks to New York’s property tax exemption for solar, you won’t pay taxes on any of it!

Remember: these figures are estimates. Your home is unique, and how much money solar will save you depends on that uniqueness. Thankfully, we know some experts on Long Island. Just sign up for personalized savings estimates and one of them will be more than happy to go over all those details and help you craft a plan to get the maximum savings from a solar power system in your home. Your quote is 100% free, so go ahead and shop around… grab two or three, or five, and compare all your possible options.

 Option 3: On-Bill Recovery Loan

If you’ve got some of the cash to put down on solar in anticipation of those big tax credits, you can make a ton of money, and your loan payments won’t even exceed your energy savings. Here’s how it works:

New York has a second special kind of solar loan called an “On-Bill Recovery Loan.” Unlike the Smart Energy Loan, this program will only lend you as much money as you can pay back with bill savings. And instead of paying your loan to a bank, the fixed costs will just appear on your energy bill, and your usage will be offset by the energy your panels produce.

That means you can finance about 55% of the system cost with the loan, and the other 45% has to come from your pocket, or your brother in-law in Poughkeepsie, or whatever you’ve got. But here’s the important thing: The tax credits at the end of the year will more-than cover the money you spend.

In our example of a 5-kW solar system, the cost is $21,500. Your loan will be for $11,869, meaning you’ll have a bill of $9,631 due at installation time. When you file your taxes, you’ll be getting that same $6,450 from the Feds, and $5,000 from the state of New York. You’ll come out ahead on the year, and your loan payments will equal your electric bill savings.

And each year, when PSE&G raises rates, you’ll still be paying the same amount for you loan, meaning you’ll slowly start to come out ahead. Over the 25-year life of the system, the savings on your bill will add up to an astounding $24,368. And considering your out-of-pocket investment is 0 after the first year, the rate of return is essentially infinite. That’s HUGE!

 Option 4: Solar Purchase

Okay, so you’ve got some cash and you’re ready to buy. An outright purchase can be a good idea if you’re averse to financing. But for this option, the rate of return is actually lower, since you’re sinking a large amount of money into it now, as opposed to small amounts over time.

In this example, you’re paying the $21,500 (after rebate) cost of the system up front. You’ll get the solar tax credits, and you’ll start realizing energy bill savings from day 1. If you’re the kind of person who wants solar now and likes to pay cash for big purchases, read on:

Here’s how the numbers work for a solar purchase on Long Island:

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  • Installing a typical 5-kW solar system should start at about $22,500. Don’t worry – the incentives available will reduce that number quickly.
  • New York has a state rebate of $200 per kilowatt of panels, which reduces your up-front costs. That system will cost you only $21,500 after this rebate.
  • At the end of the year, the federal government will give you a 30% tax credit based on the cost of your system. That’s $6,450. You can take the credit over two years if you don’t owe $6,450 in taxes this year.
  • New York will ALSO give you a humongous tax credit. 25% of costs up to $5,000. You qualify for the maximum here, so take another 5 grand off the year-1 price.
  • The electricity you’ll save in the first year of operation would have cost $1,017. That’s like a movie date every other week, with snacks!
  • All those savings and incentives mean the first-year cost of your 5-kW system is just $9,003.
  • With a conservative estimate of 3.5% per year for the future rise of electricity prices, your investment will be fully paid off after 9 years, and you’ll be making a profit until 2039 or later.
  • Your total profit in 25 years will be an astonishing $29,580! The rate of return on your investment will be 14%, which is much better than an investment in an S&P 500 index fund.
  • And don’t forget… your home’s value just increased by more than $20,000, too (your expected annual electricity savings over 20 years), and thanks to New York’s property tax exemption for solar, you won’t pay taxes on any of it!

Remember: these figures are estimates. Your home is unique, and how much money solar will save you depends on that uniqueness. Thankfully, we know some experts in New York. Just sign up for personalized savings estimates and one of them will be more than happy to go over all those details and help you craft a plan to get the maximum savings from a solar power system in your home. Your quote is 100% free, so go ahead and shop around… grab two or three, or five, and compare all your possible options.

Additional Information about Solar in New York

New York Solar Power Rebates

The state’s NY-Sun rebate program is moving slowly toward its final payouts, but there are still some good rebates available. Currently, you’ll qualify for $200 for every kilowatt your system is rated. That’s a cool $1,000 off a typical residential solar installation. All right, New York!

New York Tax Exemptions for Solar

New York sets the example for all other states when it comes to reducing the burdens on homeowners who want to go solar. When you pay for installation of solar panels in New York, you won’t spend a penny in sales tax.

Furthermore, New York exempts the value of your solar installation from property taxes. Numerous studies around the country have shown that homes with solar panels sell for more than homes without. The premium is about equal to the 20-year energy savings. That means a home in New York with solar panels on it will sell for about $20,000 more than one without them, and the state exempts that extra value from property taxes!

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