Buffalo, NY

The New York Solar Equipment Tax Credit is a state tax incentive that helps homeowners reduce the cost of going solar. This credit allows you to claim 25% of your qualified solar energy system equipment costs, up to a maximum credit of $5,000. The solar system must use solar radiation to produce energy for heating, cooling, hot water, or electricity for your home.

To qualify for this credit, you must purchase solar equipment, lease solar equipment through a written agreement, or enter into a 10-year power purchase agreement for solar energy. The system must be installed at your primary residence in New York State. While this credit is not refundable (meaning you won’t get cash back if the credit exceeds your tax liability), any unused credit amount can be carried forward for up to five years, giving you flexibility in how you use this benefit. You’ll need to file Form IT-255 to claim this credit on your state tax return.

New York’s Property Tax Exemption for solar energy systems allows homeowners to avoid paying property taxes on the increased value that solar panels add to their home. When you install a solar system, your home’s assessed value typically increases, but this exemption protects you from paying higher property taxes on that added value for 15 years. The exemption applies to the difference between your home’s value with and without the solar system.

To qualify, your solar system must be constructed between January 1, 1991 and January 1, 2030, or have existed before July 1, 1988. The system must include equipment like solar panels, inverters, batteries, and other components necessary for collecting and converting solar energy. However, this benefit isn’t automatic – each local government (county, city, town, village, and school district) can choose whether to offer this exemption, so you’ll need to check if your area participates. Some local governments may also require you to enter into a payment agreement instead of receiving the full exemption, so it’s important to understand your local rules before installing your system.

New York’s Sales Tax Exemption for residential solar energy systems removes state sales tax from solar equipment purchases and installations. This exemption eliminates the standard 4% New York State sales tax, plus an additional 3/8% tax in the Metropolitan Commuter Transportation District (which includes New York City and surrounding counties). The exemption has been in effect since 2005 and applies to all residential solar energy system equipment and installation services.

The financial benefit varies by location since local jurisdictions can choose whether to offer the exemption. Many counties and cities provide full exemption from both state and local sales taxes (showing 0% tax rates), while others still charge local sales tax rates ranging from 1.5% to 4.5%. For example, homeowners in Albany County, Erie County, Nassau County, Suffolk County, and New York City pay no sales tax on solar installations, while those in areas like Monroe County or Onondaga County still pay 4% local sales tax. On a typical $20,000 solar installation, this exemption could save homeowners between $800 to $1,750 depending on their location.

The exemption applies specifically to residential solar energy systems equipment and installation services, with no income limits or system size restrictions mentioned. There are no stated deadlines or expiration dates for this tax exemption. Homeowners should verify their local jurisdiction’s participation in the program, as tax rates can change and some cities within exempt counties may still impose local taxes. The state publishes updated rate tables showing which areas provide the full exemption versus those that still charge local sales tax.

The NY-Sun Program is New York State’s comprehensive solar incentive initiative that provides financial support to make solar installations more affordable for homeowners, businesses, and communities across the state. Administered by NYSERDA (New York State Energy Research and Development Authority) in partnership with local utilities, this program offers direct cash incentives to reduce the upfront cost of installing solar panels on your property.

The program uses a regional approach with three main areas: Con Edison territory, Long Island, and Upstate New York. Each region has allocated megawatt (MW) blocks with specific incentive amounts that decrease over time as solar becomes more cost-effective. The exact incentive amount varies by region and is updated in real-time through online dashboards, but generally provides substantial savings on your solar installation costs. The program is designed to phase out incentives gradually as the solar market becomes self-sustaining, so earlier participants typically receive higher incentive amounts.

Eligibility includes residential homes, businesses, and multifamily properties, with specific requirements varying by project type and location. There are no fixed deadlines, but incentives are available on a first-come, first-served basis until each MW block is fully subscribed. Homeowners should act promptly since incentive levels decrease as blocks fill up, and you’ll need to work with a participating contractor to access these benefits.

Net metering in New York allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the power grid. When your solar system produces more energy than your home uses, that extra power flows to the grid and you receive a 1:1 credit – meaning you get full retail value for every kilowatt-hour you export. These credits can then be used to offset your electricity bill during times when your solar panels aren’t producing enough power, like at night or during cloudy days.

The financial benefit varies by utility company, but all major New York utilities offer this 1:1 credit system. However, there is a monthly fee called the Contribution Benefits Charge (CBC) that ranges from $0.85 to $1.45 per kilowatt of your solar system’s capacity. For example, if you have a 10 kW solar system with National Grid, you’d pay $14.50 per month in CBC fees. Any unused credits roll over month to month and year to year for up to 20 years, after which they expire. The utility will not issue cash payments for excess credits – they can only be used to offset future electric bills.