state series: new york– highlights of the new...

State Series: New York– Highlights of the New York Carrie Hitt, Vice President State Affairs, SEIA Shaun Chapman,Deputy Director, SolarCity Ron Kamen, EarthKind Solar/President NYSEIA Lee Peterson,Senior Manager, Reznick Group

Monday, July 30, 2012 © 2009 SEIA 2

Antitrust Reminder As a trade association of competitors, SEIA must comply with and be mindful of antitrust laws. It is important that competitively sensitive matters are not discussed on this call, including product prices or costs; sales terms or conditions; production levels; sales territories; marketing plans; industry forecasts; or bid terms. If any such topic is raised, I will stop the conversation and, if necessary, end the call. For more information, SEIA’s antitrust guidelines are available on our website.

Introduction to SEIA/NYSEIA • SEIA is the voice of the U.S. solar energy industry

– Founded in 1974 – 1,000 member companies – Across the US, including NYSEIA – Largest solar companies in the world – We promote solar to State Policy Makers, the White

House and Congress • Mission: Build a strong solar industry to power

America • The New York Solar Energy Industries Association is

the only statewide non-profit membership and trade association dedicated solely to advancing the solar energy industry in NY State. Monday, July 30, 2012 © 2009 SEIA 3

SEIA Member Benefits • Industry news and research • Discounts on SEIA conferences (Solar Power International, PV

America) and seminars (Finance Seminar, Installer Safety Seminar, Siting and Permitting Seminar, Solar Market Insight Conference)

• Free, optional listing in the online SEIA member directory and use of the SEIA member logo

• Industry leadership opportunities in technology, market and issue-based divisions, working groups and committees

• A role in the development of legislation and regulations for the solar industry

• Targeted subject-matter education, plus opportunities to present at SEIA seminars or webinars

• High-level access to solar industry leadership; networking event sponsorship opportunities


New York Electricity 2012 Facts Power Resources Generation Total Generation -2012 - 39,570 MW Generation added since 2000 - 9,174 MW Demand Response Total Demand Response available in Summer 2011 - 2,173 MW Reliability Requirements Reliability Requirement -- Summer 2012 - 38,622 MW Total Resources Available -- Summer 2012 - 43,686 MW Renewable Resources Total Renewable Resource Capacity - 2012 - 6,064 MW Total Existing Wind Generation (nameplate capacity) - 2012 - 1,414 MW Proposed Wind Generation (nameplate capacity) - 3,986 MW Power Demands Total Electric Energy Usage – 2011 -- 163,330 GWh Total Electric Energy Usage – 2010 -- 163,505 GWh Actual Peak Usage – 2011 (July 22, 2011) - - 33,865 MW Record Peak Usage (August 2, 2006) -- 33,939 MW

• Today’s Real Time Load = 22,887MW


NY ISO

NY Electric Generation Mix 2011

10% 1%

36%

30%

19%

4%

Fuel

CoalOilNat GasNuclearHydroOther


NY is a Competitive Electricity Market • Electricity customers in IOU regions can

choose their ESCO, 22% of customers have and 50% of load has migrated

• Electricity competition is overseen by the Department of Public Service

• Top Five LSEs in the state: – Consolidated Edison – Long Island Power Authority – Niagara Mohawk – New York Power Authority – Hess (competitive ESCO)


Retail Sales and Prices,2010 EIA


New York is Number 7 in PV Ranking

California 29%

New Jersey 17%

Next Five States 34%

Rest of U.S. 20%

2011 PV Installations by Major Market State 2011 Annual Installations

2011 Ranking

California

542.2 1

New Jersey

313.3 2

Arizona

273.2 3

New Mexico

115.8 4

Colorado

90.8 5

Pennsylvania

87.9 6

New York

59.9 7 North Carolina

54.8 8

Texas

47.1 9

Nevada

43.6 10

Monday, July 30, 2012 © 2009 SEIA 11

The Solar Industry is active in NY, but concentrated in Long Island

Net Metering • Net metering cap was raised in 2008:

– 2MW project cap • 25 kW for residential solar or wind;

– 1% of Utility’s 2005 peak demand – No VNM; agricultural meter aggregation allowed

• Starting to hit some net metering limits in certain jurisdictions; – Regulatory and legislative fixes possible

http://freeingthegrid.org/#state-grades/new-york

Monday, July 30, 2012 © 2009 SEIA 12

http://freeingthegrid.org/

New York RPS • 29% by 2015 • Customer sited tier is 6% of the annual requirement • CST consists of fuel cells, PV, SHW,wind and

methane • Applies to the IOUs only • Managed by NYSERDA, via the RPS surcharge fund • Solar programs run through Program Opportunity

Notice (PON) 2112 • Added a Geographical Balancing Program in 2010

PON2156

NYSERDA NY Sun Program PON 2112 - Primary way residential, small commercial funded; systems < 50 kW - Must be NYSERDA eligible installer - Installer entities limited to 400 kW installed per

month - Counts cap counts against PON 2112 funds only - Cap has been raised twice since Jan ‘12

- Funded through 2013

Monday, July 30, 2012 © 2009 SEIA 14

NYSERDA NY Sun Program PON 2156, 2484 • Program established to bring geographic equity

– Focus on larger commercial – Downstate focus

• Competitive bidding rounds PON 2589 • Program Statewide (save Long Island) • Some programmatic changes made last week

(7/16)

Monday, July 30, 2012 © 2009 SEIA 15

NYSERDA NY Sun Program

Monday, July 30, 2012 © 2009 SEIA 16

2012 Legislation • Commercial Tax Bill:

http://open.nysenate.gov/legislation/bill/S3203B-2011

• NYC Property Tax Abatement: http://open.nysenate.gov/legislation/bill/S7711-2011

• Extends residential tax credit to leased systems: http://open.nysenate.gov/legislation/bill/S149B-2011

• NY Solar Jobs Act

Monday, July 30, 2012 © 2009 SEIA 17



http://open.nysenate.gov/legislation/bill/S7711-2011

http://open.nysenate.gov/legislation/bill/S7711-2011



Long Island Feed In Tariff Program

• The owner of an eligible solar photovoltaic (PV) electric system is paid a fixed rate for every solar kilowatt hour generated over the term of a Purchase Power Agreement (PPA) between the owner and LIPA which will have a 20-year term. FIT project MUST be interconnected at the distribution level of 13.2 kV.

• Those payments may assist the PV system owner or developer in obtaining project financing. This model has been used successfully by other utilities in the United States to encourage solar PV projects.

• Applications were accepted beginning Monday, July 16, 2012.

Monday, July 30, 2012 © 2009 SEIA 18

NY Renewable Energy Goals 45 x 15

15% Reductions through Efficiency

+ 30% Renewable Energy Supply

By 2015

20

New York Goals

NY SOLAR JOBS ACT= ENERGY AND NATIONAL

SECURITY, JOBS AND ENVIRONMENTAL BENEFITS

New York Jobs Supporters

Over 100 Memos of Support Many marquee and household names:

– General Electric – Dow – Saatchi and Saatchi – Mitsubishi – Staples – Wal-Mart

Broad Solar Industry and Labor Support:

– New York Solar Energy Industry Association (NYSEIA)

– The Solar Energy Industry Association (SEIA)

– The Solar Alliance – Consortium for Worker Education – People United for Sustainable

Housing (PUSH) Buffalo – NYS – Laborers – Western New York Sustainable

Energy Association – STRIVE International – NY Solar Energy Society – IBEW? – IPPNY?

• Environmental Organizations – NRDC – Environmental Advocates – League of Conservation Voters – American Lung Association – Union of Concerned Scientists – Citizens Campaign for the

Environment

Circular 230 and Legal Disclaimer • To ensure compliance with the requirements

imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

• The content contained in this presentation does not constitute legal advice. This content does not and shall not be deemed to constitute legal advice of any kind.

New York Tax - Solar

• Tax – Topics for Today’s Webinar – Residential Solar Credit - State – New York State Real Property Tax Exemption – New York City Real Property Tax Abatement – New York State Residential Solar Sales Tax Exemption – New York City Residential Solar Sales Tax Exemption – Conservation Subsidies and Incentives - Both – Sales of Electricity - Both – Sales of Renewable Energy Certificates – Both

• Federal/State/City Tax Overlap

– IRC Conformity – Section 1603 Grant State/City Taxability – Bonus Depreciation

New York “Non-Energy” Tax Benefits • Brownfields redevelopment • Empire zones • Energy effectiveness • Environmental assistance • Environmental R&D • High/bio technology • Industrial effectiveness • Liberty zones • Minority and women-owned business • Training assistance

Check state for updates.

Residential Solar Credit - State • An individual taxpayer is allowed a credit against

personal income taxes equal to 25% of qualified solar energy system equipment expenditures, applicable to equipment placed in service in tax years beginning after 1997.

• The expenditure cap is the product of $6 and the number of watts included in the rated capacity of the solar electric generating equipment.

• The credit claimed may not exceed $5,000 for property placed in service on or after September 1, 2006.

• No expiration

Residential Solar Credit, cont. • Does not include interest or other finance

charges.

• The amount of any federal, state or local grant received by the taxpayer, which was used for the purchase and/or installation of the equipment and which was not included in the federal gross income of the taxpayer, is not included in the amount of the expenditures.

Residential Solar Credit - State, cont. • The term “solar energy system equipment” shall mean an arrangement or

combination of components utilizing solar radiation, which, when installed in a residence, produces energy designed to provide heating, cooling, hot water or electricity for use in such residence.

• Such arrangement or components shall not include equipment connected to solar energy system equipment that is a component of part or parts of a non-solar energy system or which uses any sort of recreational facility or equipment as a storage medium.

• The tax credit is also available for equipment using solar radiation to provide heating, cooling and/or hot water.

• Special rules for condominium management associations and cooperative housing corporations.

• Five year carryforward.

State Real Property Tax Exemption • Real property that includes approved solar and energy systems is

exempt to the extent of any increase in the value of the property because of these systems - 100% exemption for 15 years

• The taxpayer must file an application for exemption with the local assessor by the local taxable status date, and must file a copy with the New York State Energy Research and Development Authority.

• A county, city, town, village or school district (except certain city school districts) can choose to disallow the exemption through the adoption of a local law or resolution.

• Instead, they may enter into a contract with the owner of property that includes a solar energy system for payments in lieu of taxes.

New York City (NYC) Real Property Tax Abatement • A property tax abatement is allowed for solar electric generating

system expenditures of certain real property located within New York City.

• The abatement allows building owners to deduct from their total real property taxes a portion of the expenditures associated with installing a PV system on an eligible building.

• A “solar electric generating system” means a system that uses solar energy to generate electricity.

• The system may not include any equipment connected to a solar electric generating system that is a component of part or parts of a non-solar electric generating system or that uses any sort of recreational facility or equipment as a storage medium.

NYC Real Property Tax Abatement, cont. • If the solar electric generating system is placed

in service on or after January 1, 2011, and before January 1, 2013, for each year of the compliance period the tax abatement will be the lesser of: – 5% of eligible solar electric generating system

expenditures; – the amount of taxes payable in the tax year; or – $62,500.

New York State Sales and Use Tax • Solar equipment is tangible personal property.

• Sales and rentals of tangible personal property are

generally presumed taxable, unless specifically exempted from state tax.

• State tax rate - 4% + local sales and use taxes.

• The term “tangible personal property” does NOT include gas, electricity, refrigeration and steam at the state level.

Sales of Electricity • A special tax is imposed on the gross operating income of

“utilities” by the state of New York.

• Included in the definition of “utility” is every person (whether or not subject to the supervision of the PSC) who sells or furnishes electricity or electric service.

• However, for utilities not subject to the supervision by the PSC, they are taxed at 0% for calendar years 2005 and thereafter.

• Utilities subject to supervision by the PSC are taxed at 0% for calendar years 2005 and thereafter on receipts from the sale of commodities of electricity, gas, steam, and water.

• Utilities subject to supervision by the PSC are taxed at 2% for calendar years 2005 and thereafter on receipts from the transportation, transmission or distribution of gas or electricity.

Sales of Renewable Energy Certificates (RECs)

• Treatment: – Intangible ?? – Inventory ?? – Capital asset ?? – Commodity ?? – Expense ??

• Federal Treatment: – Ordinary income most common – State? Presumably follows federal

State Residential Solar Sales Tax Exemption • New York provides a 100% sales and use tax

exemption for receipts from the retail sale and installation of residential solar energy systems equipment.

• “Residential solar energy systems equipment” means an arrangement or combination of components installed in a residence that utilizes solar radiation to produce energy designed to provide heating, cooling, hot water and/or electricity.

NYC Residential Solar Sales Tax Exemption • New York City passed Resolution 1121 in

August 2005 to exempt residential solar energy systems equipment and services from sales tax, pursuant to the state law (discussed immediately before).

Public Utility Conservation Subsidies and Incentives

• New York substantially follows IRC §136

• This federal provision excludes from gross income any subsidy received from a public utility for the purchase or installation of an energy conservation measure for reducing the consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.

• NYSERDA is not a public utility.

• New York City generally follows the state.

50% Bonus Depreciation

• For tax years beginning after 2002, the state tax law decouples from the federal bonus depreciation provisions, aside from the special depreciation allowance for qualified resurgence zone property and New York Liberty Zone property.

• Due to New York's fixed-date conformity with the federal bonus depreciation provisions, it does not recognize bonus depreciation.

• This decoupling requires an add-back of some, if not most, of the federal depreciation deduction to New York income.

• New York City generally follows the state.

IRC Conformity – 1603 Grants

• In general, the state of New York does not reference the IRC, but the primary base of NY corporation franchise tax is entire net income; the starting‐point for determining entire net income is the taxpayer's federal taxable income.

• Therefore, it appears that Section 1603 grants are not includable in gross income for state tax purposes.

• New York City generally follows the state. So, presumably, Section 1603 grants would not be includable in income for New York City purposes. However, remember that for purposes of the NYC real property tax abatement, expenditures incurred using a federal grant are not included.

Contact Information Carrie Hitt Solar Energy Industries

Association [email protected] Shaun Chapman SolarCity [email protected]

Ron Kamen EarthKindSolar [email protected] Lee Peterson Reznick Group [email protected]]

Monday, July 30, 2012 © 2009 SEIA 43

mailto:[email protected]




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