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The Business Council of New York supports this legislation that exempts the sale and installation of commercial solar energy systems equipment from state sales and compensating use taxes, and grants localities an option to exempt such taxes.
Commercial solar energy systems equipment that produce energy designed to provide heating, cooling, hot water/or electricity, is not inexpensive, at this time. The Business Council supports efforts to encourage the rational and reasonable deployment of solar equipment. We have witnessed that strategic and short term incentives have helped to support the private adoption of new technology in the past.
Under current New York law, an individual taxpayer is allowed a credit against the New York individual income tax equal to 25 percent of the qualified solar energy system equipment expenditures up to a maximum credit of $5,000.
The Business Council supports this and other similar efforts to expand solar energy production in the state while keeping costs under control to protect the ratepayer. The Business Council support efforts designed to quadruple annual development of solar by 2013. Solar PV has been identified as among the most environmentally benign technologies and easily deployable in urban/heavy load areas.
The Business Council remains concerned over the significant cost of Solar PV when compared with other renewables. The U.S. Energy Information Administration (EIA) uses a comprehensive system of levelized cost to determine the true, full cost of electric generation from various sources. Levelized cost reflects the cost of capital, fuel, operations, maintenance and financing, as well as an assumed utilization rate.
Using levelized cost, the EIA has determined that the cost of solar is four times that of conventional means of generation, and twice the cost of other renewables. Solar power is expensive, in part, due to its utilization rate — it does not work at night, when demand can be at its peak — and solar has a relatively high capital cost.
The Business Council does not support statutory solar quantity obligation approaches adopted in neighboring states, as these approaches have resulted in significant rate increases because of the significant levelized costs of solar, for some energy consumers including hospitals, schools, individuals on fixed incomes and industrial users.