Solar Panel Incentives Wealth Gap Excludes Low-Income Homeowners
April 16, 2024 — The well-off are taking advantage of tax incentives and tax breaks to install rooftop solar panels, while the less-well-off are missing out.
As co-op and condo boards struggle to reduce their buildings' carbon emissions enough to satisfy Local Law 97, many have used generous incentives and tax breaks to defray the cost of installing rooftop solar panels. But a new study suggests that while the well-off are taking advantage of tax incentives, the less-well-off are missing out.
The report from Columbia University and the think tank Win Climate reveals that homeowners with incomes over $50,000 are two-and-a-half times more likely to have rooftop solar panels than those who earn less than that. Additionally, only 5% of the state’s tax credit subsidies for solar panels have gone to households earning less than $50,000, according to an analysis of data from 2010 to 2022.
“The overwhelming majority of that money is going to wealthier people, but it's actually bypassing the people who need it most,” Juan-Pablo Velez, executive director of Win Climate, tells Gothamist.
Established in 1998 and amended in 2006, the state's solar tax credit offers homeowners who install rooftop solar panels a credit covering 25% of the cost, up to $5,000. The goal of the credit was to increase the use of a sustainable energy source and make solar more affordable to the most energy-burdened households. The new report shows the latter goal is not being met.
(Under the federal Inflation Reduction Act of 2022, New Yorkers who invest in solar or battery storage for their home may qualify for the Residential Clean Energy Credit, which equals 30% of the cost for projects installed between 2022-2032.)
The state Residential Solar Tax Credit Reform Act, a bill introduced last year in Albany, aims to make the subsidy fully refundable and double the eligible amount to $10,000. The bill has the support of the New York Solar Energy Industries Association, which submitted written testimony to the state Senate in February calling the current credits “inaccessible to low-income families and retirees.”
The new report estimates that legislation reforming the credit could assist more than 60% of the state’s 1.4 million energy-burdened homeowners — people who spend more than 6% of their annual income on energy.