Solar Guide

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 be installed at your primary residence in New York State and used for heating, cooling, hot water, or electricity generation.

You can qualify for this credit in three ways: purchasing solar equipment outright, entering a lease agreement for solar equipment, or signing a power purchase agreement (PPA) that spans at least 10 years for solar-generated electricity. While this is a non-refundable credit (meaning it can only reduce your tax liability to zero), any unused portion can be carried forward for up to five years, giving you flexibility to use the full benefit over time. To claim this credit, you’ll need to file Form IT-255 with your New York State tax return.

New York’s Property Tax Exemption for solar energy systems is a state tax benefit that protects homeowners from paying higher property taxes when they install solar panels or other qualifying renewable energy systems. When you add solar to your home, it typically increases your property’s assessed value, but this exemption ensures you won’t pay additional property taxes on that increased value for 15 years.

The financial benefit varies based on your home’s increased value from the solar installation, but it can save you hundreds to thousands of dollars annually in property taxes. For example, if your solar system increases your home’s assessed value by $20,000 and your local property tax rate is 2%, you would save approximately $400 per year in property taxes. The exemption covers the full increase in assessed value attributable to your solar system, including solar panels, inverters, batteries, and other necessary equipment.

To qualify, your solar system must be constructed between January 1, 1991 and January 1, 2030. The system must be designed to provide heating, cooling, hot water, or electrical energy through solar collection and conversion. There are no income requirements or property location restrictions within New York State.

Important considerations include that this is a local option program, meaning your county, city, town, village, or school district can choose to opt out of offering this exemption. You should verify with your local tax assessor that your jurisdiction participates in the program. Additionally, while you’re exempt from the increased property taxes, you may still be responsible for special assessments and ad valorem levies on the solar system’s added value.

New York’s Sales Tax Exemption for residential solar energy systems helps homeowners save money by eliminating sales tax on solar equipment purchases and installation. This state-level incentive automatically exempts you from paying the standard 4% New York State sales tax, plus the additional 3/8% tax if you live in the Metropolitan Commuter Transportation District (which includes New York City and surrounding areas).

The financial benefit varies depending on where you live in New York. All homeowners avoid the state sales tax, but local sales tax exemptions depend on your specific county or city. Many areas like Albany County, Nassau County, Suffolk County, and New York City provide full exemption from local sales taxes (0% rate). However, some counties still charge local sales tax ranging from 1.5% to 4.5%. For example, if you’re installing a $20,000 solar system in Nassau County, you’d save the full state and local taxes, while someone in Monroe County would save on state taxes but still pay 4% local tax ($800).

This exemption applies to residential solar energy systems equipment and installation services. There are no income requirements, system size limits, or application deadlines – the exemption has been in effect since 2005 and applies automatically at the point of purchase. The key consideration is understanding your local tax situation, as exemptions vary significantly by location. Your solar installer should be familiar with the tax rates in your area and can help calculate your specific savings when providing quotes.

The NY-Sun Program is New York State’s comprehensive solar incentive initiative that provides upfront financial rebates to homeowners who install solar panel systems. This state-funded program is designed to make solar energy more affordable and accessible across New York by offering direct cash incentives that reduce the initial cost of going solar.

The program operates through a regional block structure, dividing New York into three main areas: Con Edison territory, Long Island, and Upstate regions. Each region has allocated megawatts (MW) of solar capacity eligible for incentives, with rebate amounts that decrease as each block fills up. This means incentive levels change over time based on demand, and homeowners can check real-time availability through online dashboards. The program is intentionally designed to phase out incentives gradually as the solar market becomes more self-sustaining, so acting sooner rather than later ensures access to higher rebate amounts. Eligibility typically includes residential properties within New York State, and the program works alongside federal tax credits and other local incentives to maximize savings for homeowners making the switch to clean energy.

Net metering in New York allows homeowners with solar panels to receive credit for excess electricity their system produces and sends back to the power grid. When your solar panels generate more electricity 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 (kWh) you export. This credit can then offset electricity you use from the grid when your 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 valuable program. However, there is a monthly fee called the Contribution Benefits Charge (CBC) that ranges from $0.85 to $1.45 per kW of your solar system’s capacity. For example, if you have a 10 kW system with National Grid, you’d pay $14.50 per month. Any unused credits roll over month to month and year to year for up to 20 years, giving you long-term flexibility to use the value of your solar production. After 20 years, unused credits expire and no cash payments are made for excess generation.