New York City’s solar industry expects growth amidst federal uncertainty

The solar energy industry faces a period of uncertainty amidst the evolving federal policy landscape with the start of the second Trump administration this month. Many environmentalists predict that clean energy development will prevail given the tremendous economic benefits its development has provided to both red and blue states, but at what rate and with what incentive base is unclear.

Although the solar industry has experienced consistent growth nationally over the past decade – a testament to its inherent strength and the increasing demand for clean energy solutions – the potential shifts in federal incentives may create headwinds for some.

But while the future of solar energy incentives nationally is in flux, the solar market in New York City remains propitious. The foundation of the city’s success and continued momentum behind its energy transition lies within its comprehensive set of local and state policies and incentives, which will continue to propel the city’s aggressive transition to clean energy and drive progress regardless of changes at the federal level.

A key driver of solar growth is the City of Yes Carbon Neutrality (COYCN) zoning amendment. This initiative was enacted in December of 2023 to remove barriers to larger solar developments, predominately by relaxing rooftop system setback regulations on millions of homes and opening opportunities for rooftop solar installations on thousands of acres of parking lots across the city. The resulting potential for solar’s expansion is equivalent to hundreds of additional megawatts of clean energy production, resulting in millions of additional kilowatt hours of clean electricity over the lifetime of installed systems.

The relaxed zoning regulations have made it easier for property owners in the city to comply with the city’s newly enacted policies mandating sustainable development and efficiency standards. Local Laws 92 and 94, passed as part of the Climate Mobilization Act, mandate the installation of sustainable roofing systems, including solar panels, on new and renovated buildings. These laws accelerate the city’s transition to renewable energy by integrating solar into the city’s-built environment.

Similarly, Local Law 97, which mandates significant emissions reductions for large buildings, also plays a crucial role in driving the demand for solar installations. As building owners seek cost-effective solutions to comply with these regulations, solar energy represents an attractive and economically viable option given the numerous financial incentives available to offset the cost of the systems.

Currently, New York City property owners can leverage city, state, and federal incentives to offset 75-90 percent of a solar system’s cost. New York City’s Solar Property Tax Abatement provides a substantial 30% tax break for both residential and commercial property owners who install solar systems.

In addition, the New York State Solar Tax Credit allows homeowners to claim 25% of their solar energy system costs, up to a maximum of $5,000, as a state income tax credit. Additionally, the state offers a Historic Homeownership Rehabilitation Tax Credit (HTC) which gives homes that qualify for an additional 20% income tax credit from NYS. This state-level support complements the city’s initiatives, further driving solar adoption.

While the federal landscape may present some uncertainties, New York City is charting its own course towards a sustainable future. The strong foundation of local and state support, coupled with the continuous advancements in solar technology and the growing public awareness of the environmental and economic benefits of clean energy, will ensure that NYC remains a leader in the transition to clean energy.

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 Netherlands and was among the first solar professionals in the United States to become NABCEP Technical Sales certified.

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