Last updated: December2024
Written by
Catherine Lane
Solar incentives and rebates can save New Yorkers over $12,000, reducing the cost of going solar by almost 58%! These savings don’t even include the electricity bill savings provided by solar panels, which can be significant considering New York’s high electric rates.
Solar can be a fantastic investment in New York. In fact, we found that New York is one of the best states for home solar. This guide explains what you need to know about New York’s solar incentives and rebates, including what’s available, how to apply, and how long they’ll be around.
Incentive | Estimated average value | Eligibility | About |
|---|---|---|---|
Federal solar tax credit | $5,796 | All tax-paying U.S. citizens | Tax credit equal to 30% of installation costs, applied to federal income taxes |
New York solar tax credit | $5,000 | All tax-paying New York residents | Tax credit equal to 25% of system costs up to $5,000, applied to state income taxes |
NY-Sun Megawatt Block Program | $1,380 | New York solar homeowners in upstate and Con Ed regions | Rebate of $0.20 per watt of solar installed on New York homes |
Property tax exemption | $785, varies with property and system value | New York homeowners who install clean energy systems on their property | 100% exemption of property tax increases related to the installation of solar panels |
Sales tax exemption | Savings vary | Solar equipment purchased in New York | 100% exemption from state sales and use tax |
Quick Facts
Value: 30% of solar installation costs
Frequency: One-time tax credit, rollover for five years
How to apply: File IRS Form 5695 with annual tax return
New Yorkers are eligible for the federal solar tax credit when they go solar. The credit equals 30% of the costs of a solar installation and directly reduces your federal income tax liability.
The average solar system in New York will earn a federal solar tax credit of $5,796. If you owe less than what your tax credit is worth, you can roll over the remaining credit to next year’s taxes.
Remember that you don’t get the federal solar investment tax credit as a lump sum payment; your solar system won’t cost less money upfront. The tax credit reduces your income tax liability, so you’ll see the benefits when you file your taxes later in the year.
Quick Facts
Value: 25% of solar installation costs, up to $5,000
Frequency: One-time tax credit, rollover until limit is met
How to apply: File form IT-225 with annual tax return
The New York Solar Energy System and Equipment Tax Credit equals 25% of solar installation costs up to $5,000. The tax credit reduces your state income tax liability. The average solar installation in New York will earn a state solar tax credit of about $4,830.
Unlike the federal tax credit, the New York state tax credit can be claimed by people who own their solar panels and people who enter a lease or PPA agreement. If you’re leasing your solar panels, your tax credit equals 25% of the total lease payments you’ll make for the year. You can do this yearly until you reach the $5,000 tax credit cap.
You may be able to get another tax credit when you go solar if you have a historic home through the Historic Homeownership Rehabilitation credit. This credit equals 20% of qualified rehabilitation projects, which can include solar panels if they don’t alter the home’s historic appearance.
Quick Facts
Value: $0.20 per watt of solar installed (where available)
Frequency: One-time rebate
How to apply: Applications are completed by solar company
NY-Sun is a solar program run by the New York State Energy Research and Development Authority (NYSERDA) that provides incentives and financing options for solar projects.
The program’s most significant incentive is the Megawatt Block Program, which provides upfront rebates that directly lower the upfront cost of solar installations. The incentive goes right to installers, who then reduce the project's price.
The value of the Megawatt Block incentive program is based on the size of your system and where you live. The average solar system in New York will save $1,380 through the Megawatt Block program, but exact rebates will vary. The following table outlines the current MW Block incentive rates and the average total rebate value in each region:
Region | Rebate rate | Average total rebate value |
|---|---|---|
Con Ed | $0.20 / W | $1,380 |
Long Island | Program full | Program full |
Upstate | $0.20 / W | $1,380 |
The NY-Sun initiative offers additional low- and middle-income solar rebates, incentives, and financing options, such as on-bill recovery loans.
Quick Facts
Value: 100% exemption of property tax increases related to solar installation
Frequency: Annual exemption for 15 years
How to apply: Submit Form RP-487 to local property assessor
New York state officers a property tax exemption for home solar power and other renewable energy installations. Solar panels increase your property value and would increase your property taxes without an exemption. The solar property tax exemption prevents increased property taxes related to the solar installation for 15 years.
That’s some significant savings — with the typical solar installation increasing home resale value by 6.8%, New Yorkers would see an average $785 increase in their property taxes without the exemption.
Some municipalities have opted out of the property tax exemption. To see if you qualify, check the official list of non-participating jurisdictions.
Quick Facts
Value: 100% exemption of state sales and use tax
Frequency: One-time exemption
How to apply: Exemption handled by solar installation company
The Empire State exempts residential solar energy system equipment from state sales tax. Some municipalities also have solar equipment exemptions for local sales tax. Your solar installer handles sales tax exemptions.
Quick Facts
Electric rates average $0.24 per kWh in New York.
New York offers full retail net metering with an additional Customer Benefits Charge.
New York is in the process of transitioning away from full retail net metering.
Net metering is a program that allows homeowners to send excess solar energy to the grid in exchange for utility bill credits that cover the full cost of electricity you use later from the utility. For example, if your utility charges $0.24 per kWh of electricity, your solar energy credit would also be worth $0.24 per kWh.
New York’s net metering program is in a transitional phase, with New Yorkers having the ability to choose between two solar billing programs:
Phase One net metering: Homeowners get the full retail value of solar energy they send to the grid but pay an additional monthly Customer Benefits Charge (CBC) that is based on the size of their system.
Value of Distributed Energy Resources: Solar bill credits are calculated using factors including energy value, environmental value, and locational system relief value in an attempt to compensate solar homeowners more accurately. Customers also pay a CBC lower than those participating in Phase One net metering.
Utility | Phase One CBC Rate | VDER CBC Rate |
|---|---|---|
$1.37 | $0.69 | |
$1.41 | $0.70 | |
$0.85 | N/A | |
$1.45 | $0.73 | |
$0.91 | $0.46 | |
$1.39 | $0.70 | |
$1.16 | $0.58 |
New York does not offer any statewide energy storage incentives or rebates. However, the federal solar tax credit does cover battery storage, and some local programs exist. Here are the incentives New Yorkers can take advantage of when installing solar batteries:
30% Federal solar tax credit: Battery storage qualifies for the federal solar tax credit. The battery can be installed at the same time as solar, added on to an existing solar system, or installed as a standalone system with no solar input.
PSEG Long Island Battery Storage Rewards Program: Long Island Power Authority provides customers a rebate of $250 per kWh for the installed usable storage. In exchange, customers will agree to use stored power during certain peak-hour events. Applications are submitted through NY-Sun.
In New York, solar panels cost an average of $3.00 per watt of solar installed, or about $20,700 for a 6.9 kW solar system. The effective price of a solar installation drops to $8,694 after New York’s solar incentives.
Megawatt Block incentive: 6.9 kW * $0.20 per watt = $1,380
Federal solar tax credit: ($20,700 - $1,380 MW block incentive) x 30% = $5,796
New York tax credit: ($20,700 - $1,380 MW block incentive) x 25% = $4,830
Total savings: $1,380+$5,796+$4,830 =$12,006
Effective cost: $20,700 - $12,006 = $8,694
How do solar incentives and rebates work with each other? Tax credits are calculated using the total cost of your solar panel system after any rebates have been deducted. In New York, that means subtracting the cost of your Megawatt Block incentive from the system's total cost before calculating any tax credits. However, the installation cost provided by your installer will likely already have the Megwatt Block rebate factored in.
Home solar panels are an excellent investment in New York. Between the abundance of solar incentives and the state’s higher-than-average electric rates, a solar installation can pay for itself in just about five years in New York.
But every home is different, and your financial situation is unique. A solar installer is the best resource to find out if solar is right for you. Not only are local solar companies a great resource for solar, they know your neighborhood just as well as you. They can explain the nuances of solar in your area, how much it can save, and what you need to consider before getting the panels up and running.
Our solar experts recommend comparing at least three solar quotes from reputable local installers to maximize your solar savings and get the best deal on solar panels. SolarReviews can connect you with pre-vetted solar installers in Hawaii, or you can research our expansive directory of solar companies in New York to find the best company for you.
Catherine has been researching and reporting on the solar industry for five years and is the Written Content Manager at SolarReviews. She leads a dynamic team in producing informative and engaging content on residential solar to help homeowners make informed decisions about investing in solar panels.
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