Chapter 485 of 2023: Extending and Enhancing Solar Abatements
On September 22, 2023, New York State enacted Chapter 485 of 2023, which amends the existing solar and electric storage system tax abatement law, now codified in Title 4-C of the Real Property Tax Law. This law is designed to further incentivize the installation of solar electric generating systems and electric energy storage systems in New York City by extending and enhancing the benefits provided under the existing program.
Key Changes Under the Amended Law
- Clarification and Expansion of Eligible Systems
The new law clarifies that the tax abatement can now be used for both solar electric generating systems and electric energy storage equipment simultaneously. It expands the definition of eligible expenditures to include reasonable costs for materials, labor, on-site preparation, architectural and engineering services, as well as plans directly related to the construction or installation. Notably, solar parking canopy structures are now explicitly included as an eligible system.
- Extended Abatement Period
The abatement period for both solar electric generating systems and electric energy storage equipment has been extended through 2035. This extension aligns with New York State’s commitment to reducing greenhouse gas emissions and supports New York City’s initiatives under Local Law 97.
- Enhanced Abatement Terms
For projects placed in service from January 1, 2024, through December 31, 2034, the abatement has been set at the lesser of 30% of expenditures or $250,000. This amount is to be taken in equal increments annually over a four-year period. This change represents an enhancement from previous years and better aligns with federal incentives, allowing for the leveraging of federal dollars alongside this state incentive.
- Application Timeline and Process
Applications for the abatement must be received by March 15 each year for the abatement to take effect within the same calendar year. Eligible properties include Class 1, 2, and 4 properties, while those receiving ICAP, 421-a, 421-b, 421-g, or those that pay PILOTs are not eligible. The application process is managed through the New York City Department of Buildings, which transmits necessary information to the Department of Finance for application to the property tax bill.
Justification and Impact
This legislation aims to strengthen the existing incentive programs to encourage more installations of solar and electric storage systems in New York City. By extending the application period to 2036 and allowing both types of abatements to be used in conjunction, it provides more flexibility and better alignment with federal incentives under the Inflation Reduction Act. The move is consistent with New York State’s and New York City’s goals to reduce greenhouse gas emissions and ensure cleaner, more reliable power for residents
Summary
The amendments brought by Chapter 485 of 2023 represent a significant step in New York City’s efforts to promote renewable energy and energy storage solutions. Property owners looking to install solar electric generating systems and electric energy storage equipment should take note of these changes, as they present enhanced opportunities for tax abatements and financial incentives to support their investment in clean energy.
For assistance with the application process or more detailed information, please contact our office or visit the New York City Department of Buildings website.
