New York is currently considered one of the best states for solar power. Although the state is not as sunny as those in the southwest, such as California and Nevada, there are two factors that turn solar power into a great investment: the high local electricity rates increase the savings per kilowatt-hour generated, and there are great incentives such as rebates and tax exemptions.

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Why is Solar Power Financially Attractive in New York?

Electricity rates in the state of New York average at around 17 cents per kilowatt-hour, and are among the highest in the nation. Assuming the same energy consumption, a building owner in New York pays higher bills that someone in a state with lower electricity prices; however, higher rates also mean that potential savings are increased.

• Assume a solar PV system generates 10,000 kWh of energy per year. In a state where the electricity price is 12.5 cents per kWh, this translates into $1250 per year.
• However, at 17 cents per kWh the savings are $1700 per year, which is 36% higher.

As a complement to higher yearly savings, the incentives available in New York make solar power very affordable. With a low upfront cost and high yearly savings, photovoltaic systems in New York can yield double-digit rates of return.

The growth of solar power in New York has been driven in great part the state’s Renewable Portfolio Standard, which requires 50% of the energy to be generated from renewable sources by the year 2030. Although all renewable sources are fair game, solar power is characterized by its versatility, adapting to a broad range of project conditions.

Cash Rebates

Most cash rebates in New York are available from the NY-Sun program, which grants rebates for residential systems up to 25 kW, and non-residential systems up to 200 kW. Rebates depend on a lot of factors, including the type of property and the availability of funds, but they can reach values of up to $1000 per kilowatt of installed capacity.

Tax Exemptions

Solar photovoltaic systems are exempt from both the sales tax and the property tax in New York. No sales tax means not paying an extra 8.875% for a photovoltaic array, and a 15-year property tax exemption means the building increases in value without being subject to a tax hike. Since NYC has some of the highest property tax rates in the nation, this exemption makes solar power a much more attractive investment.

Tax Credits

Home and business owners who invest in solar power in New York also gain credits on both the state tax and the federal tax. It is important to note that tax credits are calculated based on the price after subtracting any cash rebates available.

Residential installations earn a state tax credit for 25% of their cost or 5000 USD, whichever is lower. This benefit applies for photovoltaic arrays, solar water heating, and solar space heating. Systems with an installed capacity of up to 25 kW are eligible, or 50 kW if owned by cooperatives.

There is also a federal tax credit for 30% of the system’s cost, which will be available until 2020. When both tax credits are combined, they reduce the upfront cost of a solar power system by more than 50 percent.

Solar Photovoltaic Array Installation Options

Before solar panels are installed, there are three important decisions to take:

• Location: Ground-mounted or rooftop-mounted
• Solar tracking:Fixed system, single-axis tracking or double-axis tracking
• Solar Panel Type:Monocrystalline, polycrystalline or thin-film panels

Solar Panel Location

Ground-mounted solar arrays have a lower cost because their installation is easier and less risky. However, the property must have the space availability, and the area must be free from objects capable of casting shadows on top of the panels. In New York City, where high-rise construction is common, finding suitable spots for ground-mounted installations can be difficult.

Rooftop-mounted solar arrays have a higher installation cost, but suitable locations are much more abundant in urban settings. The fact that the solar array is on a rooftop also means less objects can cast shadows on it. Most of the solar power potential in New York is for rooftop installations.

There are racking systems available for both mounting options, and they allow the installation to be simplified significantly.

Solar Tracking

Photovoltaic panels produce more energy when facing the sun directly, but the position of the sun in the sky changes throughout the day due to the Earth’s rotation. Solar panels can be equipped with a tracking mechanism to optimize their position throughout the day, although this comes at an extra cost. To make solar panels point towards the sun, it is necessary to adjust their tilt angle and orientation.

• Single-axis trackers adjust either the tilt angle or the orientation, but not both.
• Double-axis trackers control both variables to maximize solar panel output.

According to the US Department of Energy, single-axis tracking increases energy output by 24% on average with respect to a fixed installation, and double-axis tracking increases it by 40%. Getting a site assessment from qualified engineering professionals is the best way to determine if solar tracking makes sense financially speaking; for it to be viable, the extra energy savings must compensate the extra cost.

Fixed solar power systems can also be optimized to a degree, by using the tilt angle that results in the highest energy generation throughout the year. The NASA Atmospheric Science Data Center is an excellent web resource, where you can input your coordinates to determine solar radiation availability by month and optimal tilt angles for solar arrays.

The optimal orientation for fixed solar arrays is generally south, the direction from which most sunshine is received in northern hemisphere countries, such as the USA.

Types of Solar Panels

Another characteristic of photovoltaic systems that must be defined before installation is the type of solar panel to use.

• Monocrystalline panels offer the highest efficiency available, and the highest energy yield per square meter, but are the most expensive as well. The combination of monocrystalline panels with double-axis tracking results in the highest possible conversion efficiency.
• Polycrystalline panels strike a balance between efficiency and cost, and are the most common type as well.
• Thin-film panels are cheap and lightweight, but inefficient. They are cost-effective when the area available for solar power is very large, but can greatly limit system capacity if installed on a smaller rooftop.

The type of solar panel should also be designed based on a cost-benefit analysis: for example, specifying monocrystalline panels instead of polycrystalline panels makes sense if the added savings compensate the price increase.

Common Solar Power Issues and How to Avoid Them

Before installing any solar photovoltaic system, there are several important factors to analyze: rooftop orientation, local shading issues, and structural integrity if the system is rooftop-mounted.

Rooftop Orientation

As mentioned before, most sunlight comes from the south portion of the sky in the northern hemisphere, and a solar PV system mounted on a south-facing rooftop will have a higher energy output than in any other orientation.

East-facing rooftops result in a higher generation during the morning, while west-facing rooftops reach maximum output during the afternoon; these orientations can be beneficial if their output matches the energy consumption pattern of the building. North-facing rooftops are the least suitable for a solar array, but the effect is not drastic if their tilt angle is low.

Shading Issues

Shading is another important factor to analyze, especially in a city with plenty of high-rise buildings such as New York. Solar panels in photovoltaic arrays are normally connected in strings, and one shaded panel is enough to bring down the production of an entire circuit. Ideally, shadows should be avoided, but if this is not possible there are two alternatives:

• Microinverters convert the individual output of each solar panel to alternating current and are connected in parallel, not series. If one panel is producing a limited output due to shading, the other panels in the circuit are not affected.
• DC (direct-current) optimizers accomplish the same effect, while keeping the panels in a series DC circuit. These systems optimize voltage and current conditions for each panel individually, and a central inverter converts their aggregated output to alternating current.

Both configurations can enhance conversion efficiency from sunlight to electricity. They are recommended if the extra energy generation makes up for the additional expense.

Structural Integrity

For rooftop-mounted PV arrays, it is also important to ensure that the existing structure can bear the extra weight: solar panels typically add between one and two kilograms of weight per square foot of rooftop area. Most of the rooftop–mounted PV arrays require structural analysis of the existing roof structure. The existing roof structure should be analyzed to ensure compliance with local building code requirements regarding the combined self-weight, wind load, snow load, etc.

Some materials are not well suited for the installation of a solar array. For example, older rooftops made from asbestos-cement tiles tend to become brittle over time, and may require a complete upgrade or reinforcement before accommodating a solar photovoltaic array.

Roofs are mainly divided into two categories: sloping roofs and flat roofs. Depending on the slope of the roof and exposure to the sun, flush-mounted solar PV arrays are recommended in most cases on a sloping roof. “Flush-mounted” means PV arrays are installed parallel to the roof surface. Fixed, single-axis or double-axis supporting rack systems for the PV arrays are used for flat roofs.

Proper waterproofing detail between the existing roofing membrane and PV array attachment is a key component and it should be designed to conform with the existing roofing assembly.

Financial Performance of Solar Power in New York

The following example illustrates how lucrative solar power can be in New York. Assume a 20-kW photovoltaic array will be used in a multi-tenant residential building.

• Assuming an installed cost of $3000 per kilowatt, the total price is $60,000.
• With the rebate of $400/kW, the price is reduced to $52,000.
• Their state tax credit is for 25% of the cost after rebates or $5000, whichever is lower. The $5000 cap applies in this case, and the cost is reduced to $47,000.
• Finally, the 30% federal tax credit of $15,600 reduces the net cost to $31,400, almost half of the price before incentives.
• With the high electricity rates in New York City, you can expect to save around $5000 per year with a 20-kW photovoltaic system.

Saving $5000 per year for an initial investment of $31,400 results in a 16% ROI, which is much better than the stock market’s average. If you have access to a low-interest loan, it is possible to install the photovoltaic system for an upfront cost of zero, and yearly savings are so high that they can completely pay off the loan by themselves.

In addition to an excellent financial performance, solar panels typically have a service life or around 25 years. Since energy prices tend to increase year by year, the photovoltaic system yields higher savings each year.

Solar Power in New York: Concluding Remarks

High electricity prices and generous incentives are a winning combination for solar power in New York, turning it into a lucrative investment. However, top performance can only be achieved if the system is properly specified and sized. The best recommendation is to get in touch with a qualified engineering firm for site assessment and photovoltaic system design, and to work with a qualified contractor during installation. If you have access to loans with interest rates below 10 percent, the photovoltaic system savings can pay them off completely, while still leaving net savings from the first year of operation.