New York Solar Panels

New York’s Solar Energy System Equipment Credit (SESEC) allows homeowners to deduct 25% of the net cost of their solar installation directly from their New York State income taxes, up to a maximum credit of $5,000. For the average solar installation in New York, this translates to roughly $4,800–$5,000 in state tax savings. The credit is claimed using Form IT-255 when filing your state tax return.

This credit applies whether you purchase your system outright or enter into a qualifying solar lease or power purchase agreement (PPA) of at least 10 years. If you lease, the credit equals 25% of your annual lease payments each year until you reach the $5,000 lifetime cap. If your tax liability in the first year is less than the full credit amount, you can carry over the unused portion for up to five additional years.

Eligible systems include residential solar installations up to 25 kW. There is no income limit to qualify. Be sure to retain all documentation of your installation costs and have your installer provide a detailed invoice, as this will be required when filing Form IT-255 with the New York State Department of Taxation and Finance.

The NY-Sun Megawatt Block incentive for standard-income customers is currently closed in both the Con Edison region (closed May 29, 2025) and the Upstate region (closed December 17, 2025). However, income-qualified households at or below 80% of the Area Median Income (AMI) remain eligible for the Affordable Solar Residential Incentive. Rebate amounts are $0.80 per watt of nameplate capacity in the Upstate and Con Edison regions, and $0.40 per watt on Long Island. For a typical 7 kW system in the Upstate region, this equals $5,600 in upfront savings.

You do not apply for this rebate yourself — your solar installer must be a participating NY-Sun contractor, and they handle the entire application process on your behalf. The rebate is subtracted directly from your installation cost before you pay, so you never need to wait for a check. To verify your installer is NY-Sun approved, use NYSERDA’s contractor directory at nyserda.ny.gov/find-a-solar-contractor.

To determine income eligibility, you must complete an Income Eligibility Application through NYSERDA. Eligibility is based on household income relative to county-specific AMI thresholds. Systems up to 25 kW in size qualify. Always verify current block availability and incentive levels at the NYSERDA dashboard before signing a contract, as funding is available on a first-come, first-served basis.

NYSERDA’s Residential Energy Storage Incentive Program provides upfront cash rebates to New York homeowners who install a qualifying home battery storage system through an approved contractor. The rebate is $200 per kWh of usable capacity for customers of upstate utilities (such as National Grid, NYSEG, Central Hudson, and Orange & Rockland), and $250 per kWh for customers in the Con Edison territory (NYC, Westchester, and Rockland County). For a 13.5 kWh battery like the Tesla Powerwall, this equals $2,700 upstate or $3,375 in the Con Edison region. Total incentives can reach over $6,000 per household for larger systems, with incentives available for up to 25 kWh of storage capacity.

Effective April 1, 2026, enrollment in your utility’s Bring Your Own Battery (BYOB) demand response program is required to receive the NYSERDA battery incentive. The BYOB program allows the utility to briefly draw on your battery’s stored energy during peak grid events. An exception applies through June 1, 2026: if your battery brand’s OEM is not yet enrolled in the BYOB program, you can still receive the incentive without BYOB enrollment during that transition window.

The rebate is applied at the point of installation by your approved contractor — you do not need to file for it separately. Incentives are available on a first-come, first-served basis, so it is important to confirm current funding availability with NYSERDA or your installer before proceeding. Contact NYSERDA’s energy storage team at [email protected] or visit the program page for the most up-to-date information.

Long Island homeowners can receive an upfront incentive of $250 per kWh of usable battery capacity through the PSEG Long Island Battery Storage Rewards Program, with a maximum benefit of $6,250 per household. For example, a 10 kWh battery system would earn a $2,500 rebate. This program is available to PSEG Long Island customers and is administered in partnership with NY-Sun and approved solar/storage installers.

In exchange for the upfront incentive, participating customers agree to enroll in the Dynamic Load Management (DLM) demand response program. This allows PSEG Long Island to dispatch stored energy from your battery approximately 10 times per year during a four-hour window (2:00 p.m. to 7:00 p.m.) between May 1 and September 30. This helps relieve stress on the grid during peak summer demand periods while you still benefit from backup power at other times.

Applications are submitted through your NY-Sun approved installer. The battery system must meet PSEG Long Island’s technical eligibility requirements. This program can be combined with the federal solar Investment Tax Credit (if applicable) and the NY State Solar Tax Credit for maximum savings. Contact PSEG Long Island or visit their website for current program availability and a list of eligible battery models.

New York State exempts residential solar energy systems — including panels, inverters, mounting hardware, wiring, and installation labor — from the statewide 4% sales and use tax under NYS Tax Law §1115(ee). On a $25,000 solar installation, this exemption alone saves $1,000 in state sales tax. The exemption applies whether you purchase the system outright or have it installed under a power purchase agreement (PPA).

Many local jurisdictions in New York also exempt solar energy systems from their local sales taxes. New York City, for example, grants an exemption from its local sales and use taxes for residential solar energy systems. Combined state and local sales tax rates in New York typically range from 7% to 8.875%, meaning total savings from this exemption can reach $1,750–$2,200 on a $25,000 system depending on your location.

Residential energy storage (battery) systems also currently benefit from a state and local sales tax exemption through June 1, 2026, with a proposed extension through June 1, 2028 in the Governor’s 2026–2027 budget. Your solar installer should automatically apply these exemptions at the point of sale — no separate application is required by the homeowner.

Under Real Property Tax Law (RPTL) Section 487, any increase in your home’s assessed value resulting from the installation of a solar energy system is fully exempt from property taxes for 15 years. This means that even if your solar installation adds $20,000–$30,000 in value to your home, your property tax bill will not increase during that 15-year period. The exemption also covers battery storage systems approved by NYSERDA. New York City has additionally confirmed it will not require a Payment in Lieu of Taxes (PILOT) for energy storage systems seeking benefits under RPTL 487.

The exemption is available statewide, but with an important caveat: outside of the five largest cities (New York City, Buffalo, Rochester, Syracuse, and Yonkers), each county, city, town, village, and school district has the authority to opt in or out of offering the exemption. Before installation, confirm with your local assessor’s office that the exemption is available in your jurisdiction.

To claim the exemption, you must complete Form RP-487 (Application for Tax Exemption of Solar, Wind, or Certain Other Energy Systems) and submit it to your local assessor on or before the taxable status date (typically January 5 for most municipalities). One copy goes to NYSERDA and one to your local Department of Finance. An application filed by January 1, 2025, for example, would result in an exemption effective July 1, 2025. There is no cost to apply, and the savings over 15 years can be substantial.

The NYC Solar Electric Generating Systems (SEGS) Tax Abatement is an exclusive incentive for New York City property owners who install a qualifying grid-connected solar energy system. The abatement reduces your NYC property tax bill by 7.5% of the eligible installed system cost each year for four consecutive years, for a total benefit of 30% of installation costs. The annual benefit is capped at $62,500 per year (or $250,000 over four years), making it especially valuable for larger or more expensive installations. Solar systems placed into service between January 1, 2024 and January 1, 2035 are eligible.

This abatement can be combined with the New York State Solar Tax Credit and the RPTL Section 487 property tax exemption for maximum savings. For example, a $100,000 commercial rooftop solar installation in NYC could yield $7,500 per year in property tax reductions for four years, totaling $30,000 in savings through this program alone. Battery storage systems installed alongside solar may also qualify for the abatement.

To apply, you and your project manager must complete Form PTA4 (Property Tax Abatement Application and Agreement for Solar Electric Generating System) through the NYC Department of Buildings. If submitted by March 15, the abatement takes effect on the July 1 tax bill of the same year. If you miss the March 15 deadline, the abatement begins July 1 of the following year. Contact the NYC Department of Finance or Department of Buildings for current application requirements and eligible system specifications.

New York State currently offers full net energy metering (NEM) at the 1:1 retail electricity rate for residential solar customers. When your solar panels produce more electricity than your home uses, the excess is sent to the grid and you receive a credit on your utility bill equal to the full retail rate of electricity. Homeowners who interconnect their solar system in 2026 will be locked into this net metering rate for a full 20 years, providing long-term certainty about the value of your solar energy. Eligible system sizes are up to 25 kW for most utilities (up to 50 kW for Con Edison customers).

Important note: Customers who installed solar after January 1, 2022 are subject to a monthly Customer Benefit Contribution (CBC) charge. The CBC amount varies by utility and system size, but net metering customers pay a slightly higher CBC than those on the VDER tariff. Despite this charge, net metering is generally still the more financially advantageous option for most residential customers.

As an alternative to net metering, New York also offers the Value of Distributed Energy Resources (VDER) tariff, also known as the Value Stack. VDER compensates solar owners based on five components: locational marginal pricing (LBMP), capacity value (ICAP), environmental value (E), demand reduction value (DRV), and locational system relief value (LSRV). VDER credits can be higher or lower than retail rates depending on when and where you export energy. You can use NYSERDA’s free Value Stack Tariff Calculator at utilities.nyserda.ny.gov/ValueStack to estimate your expected VDER compensation before choosing between the two options.

Community solar allows New York homeowners, renters, businesses, and multifamily building residents to benefit from solar energy without installing panels on their own property. Subscribers sign up for a share of a larger, offsite solar project and receive monthly credits on their utility bill for the electricity their share produces. This is an ideal option for renters, those with shaded or unsuitable rooftops, or anyone who wants to go solar without the upfront cost of installation.

Community solar subscriptions in New York typically offer bill savings of 5%–15% on the portion of your electricity covered by your subscription. There is generally no upfront cost to subscribe, and most contracts allow you to cancel with reasonable notice. The program is supported by NYSERDA’s NY-Sun initiative and is available to customers of most major New York utilities.

Low-income households have access to additional savings through the Statewide Solar for All program (see separate entry). To find available community solar projects in your area, visit NYSERDA’s community solar marketplace or contact your utility provider. Subscriptions are available on a first-come, first-served basis as projects reach capacity.

The Statewide Solar for All program is a free community solar program designed specifically for low-income New Yorkers. Eligible households at or below 60% of the state median income can enroll at no cost and automatically receive monthly bill credits on their electricity bill from a community solar project. The program promises savings of up to $180 per year, and participants never need to install any equipment or pay any subscription fees.

Enrollment is automatic for qualifying utility customers in many cases, and the bill credits are applied directly to your monthly electricity statement. The program is administered by NYSERDA and is available to customers of participating utilities across New York State. No solar panels, no contracts, and no upfront investment are required — making this one of the most accessible solar benefits available to low-income New Yorkers.

To check eligibility and enroll, visit the NYSERDA Statewide Solar for All program page or contact NYSERDA at 1-866-NYSERDA (1-866-697-3732). Income eligibility is based on household size and income relative to the New York State median income. Participants may also be eligible for additional low-income solar incentives through the NY-Sun Affordable Solar program if they wish to install rooftop solar in the future.