Inflation Reduction Act

The inflation Reduction Act (IRA) of 2022 significantly expanded the Federal Solar Investment Tax Credit for businesses, small and large. This is the remaining active IRA opportunity for New York businesses—and it can be stacked with New York State incentives through the NY-Sun program to lower the cost of going solar even further.

Solar Investment Tax Credit (ITC)

• Base credit: 30% of installation cost (6% base rate + 24% bonus for meeting prevailing wage and apprenticeship requirements)
• +10% domestic content bonus
• +10% energy community bonus
• +10% low-income community bonus (projects under 5MW)
• +20% low-income bonus residential building or low-income economic benefit projects

*Low-income bonus is capped at 1.8 GW/year and limited to projects under 5MW

Deadlines

• Construction beginning July 4, 2026: credit available through December 31, 2029
• Construction beginning after July 4, 2026: credit available through December 31, 2027

Combine with New York State Incentives

• NY-Sun solar incentives and financing
• Commercial Depreciation Allowance
• NYS Real Property Tax Exemption
• NYC Real Property Tax Exemption

How to Claim the Solar Tax Credit

The ITC is applied when you file your federal tax return for the year the solar installation was placed in service. Here’s how it works:

1. Save Your Documentation. Keep receipts, invoices, and proof of purchase for your solar installation to include with your tax filing.
2. Work with a tax professional. Your preparer will complete IRS Form 3468 to claim the credit and document the qualifying investment.
3. Receive your credit. The credit reduces your federal tax liability—you’ll either receive a larger refund or owe less, depending on your situation.
4. Stack with State incentives. Apply for NY-Sun incentives and applicable tax exemptions to maximize your total savings.