New York

New York’s Solar Energy System Equipment Credit offers homeowners a valuable tax incentive when they invest in solar energy. This state tax credit equals 25% of your qualified solar equipment expenditures, up to a maximum of $5,000. Whether you purchase solar panels outright, lease solar equipment, or enter into a power purchase agreement (PPA) lasting at least ten years, you can claim this significant tax benefit to reduce your state tax liability.

To qualify, the solar system must be installed at your principal residence in New York State and must use solar radiation to produce energy for heating, cooling, hot water, or electricity for residential use. While this credit isn’t refundable, any amount exceeding your tax liability can be carried forward for up to five years, giving you flexibility in maximizing your savings. To claim the credit, you’ll need to complete Form IT-255 when filing your New York State tax return.

The New York State Property Tax Exemption (RPTL Section 487) offers homeowners a 15-year exemption from property taxes on the increased assessed value resulting from installing solar energy systems. This means if your home’s assessed value increases due to adding solar panels, you won’t pay additional property taxes on that specific increase for 15 years.

To qualify, your solar system must be constructed before January 1, 2030. The exemption applies automatically unless your local jurisdiction has opted out. Some localities may require you to enter into a Payment in Lieu of Taxes (PILOT) agreement, but they must notify you within 60 days of your installation notice. If you’re considering solar, check with your local tax assessor to confirm this exemption is available in your area, as counties, cities, towns, villages, and school districts can choose to opt out of offering this incentive.

New York’s Solar Sales Tax Exemption offers significant savings for homeowners installing residential solar energy systems. This state incentive exempts qualifying solar equipment purchases and installations from the 4% New York State sales tax and the 0.375% Metropolitan Commuter Transportation District (MCTD) tax. This means you’ll save 4-4.375% on your total solar system cost upfront, which can amount to hundreds or even thousands of dollars depending on your system size.

Eligibility is straightforward – the exemption applies to residential solar energy systems equipment purchased and installed at your home. The availability of local tax exemptions varies by location, with many counties offering complete exemption (0% tax rate) while others maintain their local portion of the sales tax. Before purchasing, check the current exemption status for your specific city or county, as some jurisdictions like Rome, Utica, and Yonkers still collect partial local taxes on solar installations. There is no expiration date for this program, as it has been in effect since 2005 and continues to be available to New York homeowners.

The NY-Sun Program is a state-sponsored initiative designed to make solar energy more affordable and accessible for New York homeowners. Through a block-based incentive structure, the program provides direct financial support to reduce the upfront cost of installing solar panels on your property. The state is divided into three regions (ConEdison, Long Island, and Upstate), each with its own incentive levels that gradually decrease as more solar capacity is installed in that area.

While specific dollar amounts vary by region and change as blocks fill up, these incentives can significantly reduce your solar installation costs. The program is available to residential, nonresidential, and commercial properties, with no income restrictions for basic participation. There is no set end date for the program, but incentives are designed to phase out naturally as the solar market matures – once all blocks in your region are fully subscribed, incentives will no longer be available. For the most current incentive rates in your area, you should check the NY-Sun MW Block Dashboards on NYSERDA’s website, as rates decrease over time as blocks fill up.

Net Metering in New York is a valuable program that allows solar homeowners to receive full credit for the excess electricity their systems generate. When your solar panels produce more power than your home uses, that surplus electricity flows back to the grid, and your utility company credits your account at a 1:1 ratio. This means for every kilowatt-hour (kWh) you send to the grid, you receive a credit for one kWh on your bill.

Each month, your exported solar production is netted against your total consumption. Any excess credits roll over indefinitely for up to 20 years before expiring. For standard rate plans, these appear as kWh credits, while time-of-use customers receive monetary credits. All major New York utilities participate, including Con Edison, National Grid, PSEG Long Island, and others, though each charges a small monthly Contribution Benefits Charge (CBC) ranging from $0.85 to $1.45 per kW of installed solar capacity. This fee helps support grid maintenance and clean energy programs.

It’s important to note that while your credits accumulate month-to-month and year-to-year, utilities will not issue cash payments for excess credits. The program is designed to offset your electricity usage over time rather than generate cash payments. This makes sizing your system appropriately for your annual consumption particularly important. Net Metering in New York provides long-term stability with the 20-year credit lifespan, making solar a reliable investment for homeowners looking to reduce their electricity bills while contributing to a cleaner energy future.