Local Incentives Stabilize Markets During National Shifts: How New York City will continue solar expansion

Given the Trump administration’s past approach to renewable energy, solar developers and installers nationwide are bracing themselves for another period of lack of support for renewables.

But the success of the Inflation Reduction Act’s (IRA) support for renewable development, in blue and red states alike, has broadly showcased the benefits of renewable energy development. According to an analysis conducted by E2, about 60 percent of all IRA-related clean economy projects – and 85 percent of total private-sector investments announced so far – have gone to Republican congressional districts. 

Thanks to the IRA’s proven boost to state economies, the Trump administration may be hard pressed to shift the industry’s momentum. 

Perhaps the most crucial item to monitor for residential and commercial solar developers is the Investment Tax Credit, which currently provides 30 percent credit for solar installations. This credit has been guaranteed through 2034 with the passage of the IRA, but some believe the credit may find its way to the chopping block under Trump’s leadership. 

And while the loss of that credit could hurt the affordability of solar in numerous states, New York State and New York City specifically find themselves in a place of resiliency, with local and statewide incentives safeguarding solar’s success for the foreseeable future.

The state’s aggressive push for emissions reductions has led to a combination of policy and regulatory shifts which, coupled with financial incentives, have alleviated permitting constraints and initial cost burdens for property owners to install solar power, encouraging expedited expansion of the solar market.

The state’s Solar Tax Credit allows homeowners to claim 25 percent of their solar energy system costs, up to a maximum of $5,000, as a state income tax credit. And lawmakers and solar advocates are actively seeking an increase in the cap from the current $5,000 to $10,000. Plus, qualifying historic residences can receive an additional 20 percent income tax credit through the state’s Historic Homeownership Rehabilitation Tax Credit (HTC). 

State-level support is amplified by the city's initiatives, which further shield the solar market from potential impacts resulting from policy shifts at the federal level. With the passage of the City of Yes Carbon Neutrality (COYCN) zoning amendment in December 2023, the city opened opportunities for solar’s expansion through reduced regulatory constraints, a necessary adjustment to allow for energy expansion in the wake of the enactment of Local Laws 92 and 94, and Local Law 97.

City of Yes Carbon Neutrality legislation streamlines solar development by relaxing setback restrictions on rooftop systems, paving the way for solar installations across millions of homes and thousands of acres of city parking lots. This expansion unlocked the potential for hundreds of additional megawatts of clean energy production.

These relaxed zoning regulations were necessary in easing the path toward compliance with the city's ambitious sustainability mandates. Local Laws 92 and 94, integral components of the Climate Mobilization Act, mandate the installation of sustainable roofing systems, including solar panels, on all new and renovated buildings. This legislation accelerates the city's renewable energy transition by integrating clean energy generation into the built environment. Furthermore, Local Law 97, which imposes stringent emissions reduction targets for large buildings, is driving a surge in solar installations for multifamily and commercial spaces. Faced with the imperative to reduce their carbon footprint, property owners are turning to solar energy as a cost-effective and environmentally sound solution. 

New York City property owners installing solar are eligible for the New York City Solar Property Tax Abatement which provides an additional tax break equivalent to 30 percent of the solar system’s cost. 

When applied in culmination, current city, state, and federal incentives will cover 75-90 percent of the initial cost of solar systems for New York City property owners. These regulations and incentives have propelled the city forward in energy efficiency and increased the rate at which solar is being installed across the boroughs. And with New York City’s electric prices running 65 percent higher than the national average and steadily increasing, solar power is poised to grant property owners an enormous advantage stabilizing energy costs and, in some cases, eliminating them altogether. 

New York City’s model is an example to cities across America of how renewable energy can be deployed swiftly and economically to forward our nation’s progress toward a clean energy future, bringing energy assurance and stability to property owners regardless of national policy. 

T.R. Ludwig is a clean energy leader with over a decade of experience in various management and executive roles within the solar industry. He is the CEO and co-founder of both Brooklyn SolarWorks and Brooklyn Solar Canopy Co. and serves as Treasurer for NYSEIA. He has led solar companies both large and small, with a focus on sales, marketing, and finance, and helped pioneer solar lending in the Northeast market. T.R. received his MBA from the Maastricht School of Management in the Netherland,s and was among the first solar professionals in the United States to become NABCEP Technical Sales certified.

Brooklyn SolarWorks | brooklynsolarworks.com