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About Incentives Go back to Page 1 This is Page 2 Go on to ROI Page |
| Like a cascading fountain, each incentive is applied to whatever remains after the preceding one is used. |
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Let’s think about a typical 5,000 Watt [5kW] PV system.
It might cost $35,000 installed. Wow - now that sounds like a lot!
Now watch as, like Alice, the price gets smaller and smaller and smaller
1 
Right now, the utility [LIPA] will pay a homeowner a rebate of $3.75 Watt
to help defray the cost of PV systems. They will pay even more - $4 / Watt - to schools and the like.
So, for a typical 5,000 Watt system, they will pony up $18,750
$35,000 - $18,750 = $16,250 The price is getting smaller, but wait - it gets even better!  Summary
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There is a Federal Tax Credit of 30%
$16,250 less 30% [$5,362.50] = $10,838 This is an important detail . . . This tax credit has a cap, for residences, of $2,000 that is far less than the $10,838.75 shown above. Seaford Solar sets up your PV system as a commercial lease. Done this way, commercial [not residential] rules apply! An Important Distinction . . . There is an important difference between a tax deduction and a tax credit. A tax deduction is subtracted from income before total tax liability is computed, while a tax credit is subtracted directly from the total tax liability. The price is getting smaller, but wait - it gets even better! Summary
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There is a New York State Tax Credit of 25%
$10,838.75 less 25% [$2,709.69] = $8,129.06 New York State has a Tax Credit cap of $3,750. Any credit amount in excess of the tax due can be carried over for a maximum of up to five years. Structuring as a leasing applies to NYS as well as the Federal tax credit. The price is getting smaller, but wait - it gets better! Summary
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Five Year Accelerated Depreciation allows you to take a tax deduction of $1,625.81
[one fifth of $8,129.06] for each of the first 5 years.
What this tax deduction is worth to you depends on your tax situation.
Is $500 a year a reasonable figure? We’ll use it here . . .
$8,129.06 less $2,500 [5 times $500] = $5,629.06 Now you see how the price kept getting smaller. This figure makes good financial sense! But wait - it gets even better! Summary
Please DO consult with a competent tax advisor! Also, please read this Disclaimer 5
The Appraisal Journal, a publication of the Appraisal Institute, had an
article in its October, 1999 issue
[ "More Evidence of Rational Market Values for Home Energy Efficiency" ]
indicating that a $1 reduction in annual utility bills adds $20 to the home value.
We are sizing this system to provide over $1,000 of power generation (at today’s prices).
By this rule, a solar system that cost a little over $8,000 adds $20,000 to the equity of the home!
This article from The Appraisal Journal gets cited all over the web. It takes a global view of energy efficiency initiatives that are applicable to solar as well as other efforts. Click here if you would like to read the original article. To view this document you need to use the Adobe Acrobat Reader. If you do not already have it installed, you can get a free copy of the Acrobat reader here 
Frankly, real estate appraisal is not a simple topic. Appraisal is more of an art, than a science. Remember that valuation depends on local conditions and local "comparable values". If you are concerned, you should probably discuss this with an appraiser who is familiar with your area. When you do, you will find that the only question is how much profit you will make above the purchase price. Your appraiser will reasure you that you will indeed recoup the $5,629 cost. The hard part is guessing how much more you can get! You will also learn that, other things being equal, a home with a solar system should sell faster and more easily. That’s not a bad thing, is it? Summary
Here are some additional goodies that make this even better . . .
In Nassau County, as in many jurisdictions, there is a Sales Tax Exemption so you can forget about that
In Nassau County, there is a 15 year Abatement on the Real Estate Assessment so you can forget about that.
You might well ask, what happens thereafter - will your assessment go up?
Because of the accelerated Federal Capital Depreciation of five years, by
the time the abatement expires, the system has depreciated to zero - it should not increase your assessment at all!
PV Systens are Summary
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