New York changes

Discussion in 'Tax Credits, Rebates and Incentives' started by zach, Jul 5, 2011.

  1. zach

    zach Member Forum Leader

    I learned a few days ago that effective July 1, 2011 NYSERDA made changes to the Home Performance with Energy Star Program (HPwES).

    Bottom line is the 10% rebate for geothermal is gone in New York state. The 10% HEMI (high effeciency measure incentive) was pulled for geothermal installs although the $13,000.00 financing measure remains in effect.

    The wrong here in my opinion is the rebate remains for fossil fuel equipment as well as wood and pellet stoves.

    Anyone other than me think this wrong and against the move towards energy effeciency?
  2. Sound Geothermal

    Sound Geothermal New Member

    It seems odd. Any idea why? Could they believe that the federal credit is sufficent?
  3. zach

    zach Member Forum Leader

    No idea why this happened.

    I sent an email to this forum's sponsor, Geoexchange, to see if they could get an answer.

    I feel the industry is owed an explanation/justification at the very least.

    The remedy is to add the rebate back. I know for a fact this may drive potential customers away from geothermal.

    NYS is already business unfriendly, this hurts geothermal installers in the state in my opinion.

    Phil, if you see this, could you bring this issue to the right person's attention at GEO?
  4. Carlos Li

    Carlos Li New Member

    I applied for 2010 NY state credit for my geothermal heat pump under solar energy credit ($ 5,000 max) since the their definition of "solar energy system equipment" was "an arrangement or combination of components utilizing solar radiation, which when installed in a residence produces energy to provide heating". Initially they allowed it but, I was audited and they are trying to deny the credit saying that the "geothermal pump does not use solar energy". As per common knowledge, the energy source for heating the house with geothermal pumps is solar radiation captured by the ground. Despite the literature from experts in the field, the usual argument by some staff at NY State tax office (who likely has no background on geothermal heat pump technology) is ongoing.

    In summary, I would encourage as many residents of NY state that have installed geothermal heat pumps attempt to claim the $5,000 solar tax credit to set a precedence to allow future customers easier acces to this credit.
  5. ssmith

    ssmith Member

    I'm with you on this one. Per IT-255-I:
    Solar energy system equipment
    means 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."

    Now, that is a definition of a geo system, especially one using ground loops. It's not your fault the state defined solar equipment that way.

    In Wisconsin : "A solar-energy system is defined as "equipment which directly converts and then transfers or stores solar energy into usable forms of thermal or electrical energy, but does not include equipment or components that would be present as part of a conventional energy system or a system that operates without mechanical means." In that case, since they used the wording "directly coverts" in their definition I could see how geo would not be considered a solar system.

    In Louisiana "Solar thermal equipment must be certified to SRCC OG-300", so geo would not apply as solar equipment there.

    NY state chose a very broad definition of solar equipment in their tax forms. I wish you well in your "discussions" with them and am interested in the outcome. They need to either allow it, or change their definition to say what they seem to mean.
  6. Carlos Li

    Carlos Li New Member

    Thanks for the reply. Those are exactly my thoughts, and it was helpful to see how other states specify solar energy with detailed specification such as "equipment which DIRECTLY converts and then transfers or stores solar energy" or are "certified to SRCC OG-300" standards. As you mentioned, the NY State Tax Law broadly defines "solar energy system equipment" as any arrangement of components that use solar radiation for heating, and does not define how the solar energy is captured, as long as it is the source of energy for heating. Unfortunately, when discussing this with the NY Sate Tax office representative, they would not accept the concept that my geothermal heat pump with ground loops was using solar radiation to heat the house, and when I asked the representative where did she think the energy for heating the house came from, she deferred to answer. Her rote response was that "their" definition of solar energy system was a Photovoltaic System or Solar Thermal system that "concentrates" the sun's light for heat. When I asked her where she obtained those specific definitions, she quoted a NY State Tax law 606(g-1). Afterwards I looked up that law, and there is no specification for photovoltaic system or a "direct/concentrating" solar capture system, just the same broad definition of any equipment utilizing solar radiation for heating. Unfortunately, this individual would not accept my explanation, and now I await a Notice of Deficiency, at which time I will have to go through appeals. As we all know, it can be very frustrating to deal with the tax offices, but on this one I think I will take it all the way up as a matter of principle. Not surprisingly, they continue delaying the process, (I responded to their initial inquiry about the system in March 2013, and only received their denial on February 2014), and meanwhile interest on the initial $ 5,000 credit keeps accumulating, ($1,179 and growing!), ( its easy for those tax officers to play when they have no accountability for their mistakes!).

    In preparing my appeal, I would like to have a definitive "technical" or "scientific" paper which specifically demonstrates that the energy from the constant ground temperature comes from solar radiation. I know it appears to be common knowledge that the ground temperature for such loops come from the sun, but I think my argument would be much stronger if I had the specific study demonstrating that it is of solar origin. Is anyone aware of any such scientific/technical paper?

    Thanks to all, I will keep the forum informed on the progress and outcome of this case. Lastly, I find it frustrating since, ultimately the spirit of these alternative energy tax credits is the concept of "helping save the environment", and why states would try to differentiate between the various forms of alternative energy means in giving credit does not make sense. For some reason, solar energy remains the darling of the alternative energy departments and maybe we need to rename geothermal heat pumps into geo-solar heat pumps. It is all in the name!
    Mark Custis and johnny1720 like this.
  7. ssmith

    ssmith Member

    Not sure if this will help you, but:

    You can start with NYSERDA's page on geo here:

    They don't specifically mention solar energy, but for more info, they mention going here, at the bottom of the page:

    click on the link for "what is ground source heat pump?" and you go here:

    "What is a ground source heat pump?

    Ground source heat pumps (GSHPs) are electrically powered systems that tap the stored energy of the greatest solar collector in existence: the earth. These systems use the earth's relatively constant temperature to provide heating, cooling, and hot water for homes and commercial buildings."

    So you would think the International Ground Source Heat Pump Association would know about such things.

    You could also go to the NY DEC's web page on geo here:

    Look at the 1st paragraph..."New York State lacks traditional geothermal energy sources (volcanoes, geysers and hot springs). However, the earth absorbs almost 50% of the sun's energy. Geothermal heat pumps utilize the energy absorbing capacity of the earth to heat indoor air during the cold winter months and remove heat from indoor air during the warm summer months."

    Something from Canada below. Read the how it works paragraph:

    Here's another one. Read the geoexchange paragraph:

    More here. There is also a nice graph of soil temp vs depth vs season in the article:

    Hope some of this helps you.
  8. Carlos Li

    Carlos Li New Member

    Thanks again for the help. I had seen the site, but not the others. I especially liked the NY Department of Environmental Conservation site where they again clarify specifically that in NY we are not talking about hot springs and geysers as the energy source, but that of the sun. It seems to be common knowledge that the source of ground heat energy used for the geo pumps comes from the sun, and I find it hard to believe that the NY tax offices will be able to refute that fact. Together with their definition of solar equipment in their solar tax credit form, I would think that any logical mind would accept geo pumps as fitting the category...but then again we need to have logical minds involved in the discussion. This is almost becoming like a sport, (this pending appeal with the tax office). With all this information, I feel confident about the situation. I will let you know how it turns out, and thanks again for all the assistance.
  9. docjenser

    docjenser Well-Known Member Industry Professional Forum Leader

    At the end of the day, you have provided them with a lot of written evidence that it this is a solar application as specified in the NYS tax law. They have not provided you with any written evidence that this is not solar, and that it is not solar radiation heating up the ground. We all know that the solar gradient is about 1 degree F for every 70 meters (220 ft), clearly not enough to make a difference in closed loop systems shallower than 500ft deep. Plus the law does not specify a minimal percentage which has to come from solar, just that it has to utilize solar radiation. So yes, you could not have a better description of a geo system than the NYS solar tax credit law.
    The same officer at NYS knows that, but clearly there are some intimidation tactics going on. I was personally audited on this, but have not heard anything for 11 months. The way the law is written is so clear, I will go to court over this if they come back.
    johnny1720 likes this.
  10. johnny1720

    johnny1720 Member

    Last year my tax person flat out laughed at me when I approached this. She said no way would she be able to
    ethically file a tax return claiming that credit.

    She teaches taxes/business at a local college.
  11. Mark Custis

    Mark Custis Not soon. Industry Professional Forum Leader

    This is all solar. Sorry she does not get it.

    What the state of New York had in mind is up to them.

  12. ssmith

    ssmith Member


    Ethics has nothing to do with paying taxes, or they wouldn't tax the crap out of us. It all comes down to numbers, definitions and interpretation of laws. If it fits, use it. The last time I called the NYS tax dept with a question on whether I could use a credit, the person on the other end (after talking to a supervisor) told me to go ahead and use it. If it wasn't applicable, they might deny it later. She also said if I chose not to claim it, then I definitely wouldn't get it. That was right from the horse's mouth, so to speak. Nothing unethical or criminal with this solar credit either, just a definition as defined by the tax dept that fits a geo system, pure and simple. Whether that was their intention, doesn't really matter. Unfortunately, the tax dept makes the rules, so it will be interesting to see where this goes eventually.
  13. johnny1720

    johnny1720 Member

    I wonder if I can file an amended return for 2012?

    That was 10% or $5,000 right?
  14. docjenser

    docjenser Well-Known Member Industry Professional Forum Leader

    And she knows that how? Maybe she should not teach if she has an opinion but she did not read the law.
    The tax department does not make the law, the law is also binding for them, they have to follow it and enforce it.

    That is 25%, capped at $5000.

    Could you claim it in 2013? Since you can also carry it forward.
  15. Carlos Li

    Carlos Li New Member

    Thanks for all the interest and support on this issue.

    I agree that it all comes down to the definition as stated by NY state tax law of what qualifies as solar energy system. My interpretation of the NY definition of solar equipment, ( and I looked at their definitions word for word), and with my understanding of the energy source for geothermal pumps, I believe the state will have a hard time denying my claim. I do not believe "expertise" in tax laws would really add support to their argument, as the definition as stated in the law is quite simple and straightforward. NY state tax department may make the rules, but even they must follow the laws they create, and if their definitions fit a geo system, they cannot assume that the NY public "knows" what they did or did not mean by the law unless specifically stated so. I would be more concerned if they had an "expert" on geothermal pumps supporting their argument that geo does not use solar radiant energy for heat.

    I should be hearing from "them" in a few weeks if they decide to continue denying my claim. It will be interesting to see if they continue to argue after I had sent them literature support on the role of solar radiation on geothermal loop systems.
  16. Mark Custis

    Mark Custis Not soon. Industry Professional Forum Leader


    I helped Zach plan and install his system.

    I support your claim. The law makers may have meant shinny roof top panels, but you are correct this is all solar. From the local Conn-Ed wire to the what ever we drive, to the peat bogs of UK. Trees into cord wood in Ohio, blowing the tops off mountains in West VA, or that icky sand in Alberta, It is ALL solar. It came from the sun.

    Good luck,


    ps. I live in Lorain County Ohio and almost know how to read Spanish.
  17. birkie

    birkie Member

    I'm sure you could. In fact, the advice I was given by a tax expert was to file without the credit, pay the taxes, then amend the return and ask for the credit. That way if they choose to deny, you can fight it without penalties or interest to worry about. In the worst case scenario, they deny it any you simply don't get the credit.
  18. johnny1720

    johnny1720 Member

    I am going to call my tax lady back again. I already filed for 2013.
  19. docjenser

    docjenser Well-Known Member Industry Professional Forum Leader

    Attached is a flyer from the department of ENERGY clarifying what geothermal actually is:

    "Ground-source heat

    pumps are also known as geothermal heat pumps,

    though this is a bit of a misnomer since the ultimate

    heat source with most ground-source heat pumps is

    really solar energy—which maintains the long-term

    earth temperatures within the top few meters of the

    ground surface"

    How much clearer can this be said?

    Attached Files:

  20. Carlos Li

    Carlos Li New Member

    For those interested: an update on my ongoing case to claim solar tax credit for New York state.

    I just received the 2nd denial notification for my solar energy tax credit regarding the installation of my geothermal heat pup system. Their justification was again, NY State Tax law 606(g-1) and they added PBS/Public Service/Article 4, 66j(d). As I previously stated, Law 606 has the exact same definition described on the IT-255 form of what constitutes qualifying "solar energy system as any arrangement of components that use solar radiation for heating". I don't think the tax reviewer really understands that Law 606 does nothing but support geothermal heat pumps as qualifying for the solar tax credit. Even more frustrating, when I looked up PBS/Public Service/Article 4, 66j(d), it is a NY Code that refers to" Net energy metering for solar electric generating systems". It has nothing to do with geothermal heat pumps, and has nothing to do with defining what solar equipment qualifies under the tax credit. It seems to me that I am dealing with an individual who refuses to accept the principle behind geothermal heat pumps, which complies with the NY Tax's broad definition of solar equipment. Or, perhaps this individual does understand, and is trying to confound the debate with a bunch of "legalese" nonsense.

    Either way, I plan to pursue to the next step, which is to await for a Notice of deficiency, and then submit an appeal through either the Tax Department's Bureau of Conciliation and Mediation Services or through the independent Division of Tax Appeals. Most likely I will start with the Bureau of Conciliation and Mediation.

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