RENEWABLE ENERGY INCENTIVES – NY
New York State is working hard to become a solar-friendly giant, and the NY-Sun PV Incentive Program offered through the New York State Energy Research and Development Authority (NYSERDA) drives this point home in a big way. NY-Sun offers incentives on solar installations based on size, region, and the combined installed wattage for that region, maxing out at a combined 3.175 gigawatts for the state—this is what’s known as a Megawatt Block Incentive Structure Program (and you can monitor the block updates in your area on the NYSERDA website). Approved incentives are paid directly to the installer and subtracted from your system contract, so you are not required to have that portion of the system cost in-hand upfront (and only approved NYSERDA installers are eligible for the incentive, which Smucker’s Energy is).
New York State also offers a state income tax credit of 25% of the system cost (up to $5,000)—if this number exceeds your tax liability for the year, the excess can be carried over to the next year. With over three-quarters of a billion dollars committed to the NY-Sun program through 2023, plus the income tax credit on home installations, now is the time to get active in the solar market for New York residents.
FEDERAL TAX CREDIT
The federal government offers a tax credit (known as the Solar Investment Tax Credit) on systems that begin construction before December 31st, 2019 for 30% of the system cost, with no cap (a limit of $2,000 was removed from residential systems back in 2008). It’s important to note that this is a credit and, not a deduction; a deduction is removed from your taxable income, but a credit is directly removed from your final tax liability. If the 30% exceeds your total tax liability for that year, it can be rolled over to the following year and further deducted from your liability for that year. Currently, the 30% credit period ends on December 31st, 2019 and gradually ramps down over the following three years to 10%, after which it ends completely for residential systems and stays at 10% for commercial systems for the foreseeable future.
With these changes on the horizon, now is the time to move on making the switch to clean energy. Contact a Smucker’s representative today to find out how much you can save by going solar!
USDA REAP GRANT
For rural small companies, local government offices, and agricultural businesses (such as farms), the United States Department of Agriculture instituted a grant/loan program in 2003 that sought to assist these institutions in establishing clean, renewable energy sources (like solar systems and wind generators) that would ultimately lead to massive cost savings. With the USDA now accepting grants year-round (with yearly deadlines on April 30th and October 31st), Smucker’s stands ready to help you save thousands on your eligible solar or wind installation by handling the applications for the grant start to finish. If you qualify for a USDA grant, you may be in a position to save over 50% of your base system cost with the Federal tax credit and other local incentives taken into consideration.
The grant program (called the Rural Energy for America Program, or REAP) is for up to 25% of the total solar or wind system cost, with a cap of $500,000. Eligibility is limited to small businesses (as defined by federal standards), farms, land-grant universities and colleges, government offices, and electric cooperatives and public power companies located in designated ‘rural’ bounding areas by the USDA (agricultural producers are not limited to the rural bounding areas). There are a few guidelines to keep in mind when calculating grant eligibility:
- The USDA REAP is a “competition” grant, meaning that grants are non-guaranteed and are organized according to the requested amount (below $20,000 and above $20,000, also referred to as “Unrestricted”). Applicants within their respective categories are essentially competing against each other for grant money. Grants are paid out according to technical merit, energy efficiency, project readiness, and more. There are specific annual application deadlines for the grant—for 2016 and presumably, beyond, the $20,000 or less deadline is October 31st, and the Unrestricted is April 30th (similar to Tax Day, these dates automatically adjust to the closest following business day). The USDA conducts an on-site inspection of all awarded systems, and following approval, they send their grant payment via the SAMs systems as soon as “[the applicant] fully utilizes the funds from [their] matching share” (per the USDA website). Projects must start construction within 24 months of receiving the grant.
- Site usage must be considered at least 51% commercial (or otherwise eligible) power to apply for the grant. For properties that are both residential and commercial in nature, the grant can only be calculated based on the percentage of electricity used commercially. In other words, if a farm and a home are on the same meter, and the farm uses 60% of the electricity fed to that meter, the USDA grant amount will be calculated using a number that is 60% of the system cost—not the total system cost. If there are separate commercial and residential meters, only the commercial meter is eligible for the grant.
- There are three grant application tiers: projects costing under $80,000, projects costing between $80,000 and $200,000, and projects costing over $200,000. Each tier has its own application form that needs to be submitted, but Smucker’s Energy works closely with you to correctly fill out and submit each form according to your system specifications.
Over $60 million in grants and loan guarantees was awarded in 2015 after the USDA expanded their program and budget even further to encourage submission and streamline the application process. The REAP Program continues to serve as one of the premier incentives for qualifying agricultural entities looking to transfer to affordable, renewable energy.