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) of at least 10 years to buy electricity from solar panels you don’t own. 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. This makes solar more affordable by reducing your New York State income tax bill while you transition to clean energy.

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 tax rate is 2%, you could save $400 per year in property taxes. The exemption covers solar energy systems, wind energy systems, battery storage systems, and several other renewable energy technologies installed on residential properties.

To qualify, your renewable energy system must be constructed between January 1, 1991 and January 1, 2030, though some newer technologies like battery storage must be installed after January 1, 2018. There are no income requirements or property location restrictions. However, this is a local option program, meaning your county, city, town, village, or school district can choose whether to offer the exemption, so you’ll need to check with your local tax assessor to confirm availability in your area.

Important considerations include that some local governments may require you to enter into a Payment in Lieu of Taxes (PILOT) agreement, and you must provide written notice to local officials when you sign your solar contract or interconnection agreement. The exemption only applies to the increased assessed value from the renewable energy system itself, not your entire property value, and you’ll still be responsible for special assessments and ad valorem levies.

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

The local tax savings vary significantly depending on where you live in New York. Some counties and cities provide full exemption from local sales taxes (bringing your total tax rate to 0%), while others still charge their local rates. For example, residents in Albany County, Erie County, Nassau County, Suffolk County, and New York City pay no sales tax on solar installations. However, homeowners in areas like Allegany County still pay 4.5% in local taxes, and those in Monroe County pay 4% local tax. The exemption applies to both the solar equipment itself and the installation services, making it a valuable benefit for any homeowner considering solar energy in New York.

The NY-Sun Program is New York State’s comprehensive solar incentive initiative that provides upfront cash 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 financial incentives that reduce the initial cost of going solar.

The program operates through a unique “MW Block” system that divides the state into three regions (ConEdison, Long Island, and Upstate), with each region offering different incentive amounts that decrease over time as solar adoption grows. While the source doesn’t specify exact dollar amounts, incentives are available until all allocated megawatts in each regional block are fully subscribed. The program is intentionally designed to phase out incentives as the solar market becomes more self-sustaining, meaning earlier participants typically receive higher rebate amounts.

Homeowners should know that incentive levels change in real-time based on demand and are available on a first-come, first-served basis until each regional block is exhausted. To participate, you’ll need to work with a NY-Sun participating contractor and ensure your project meets the program’s technical requirements. Since this is a limited-time opportunity with decreasing incentives, it’s important to act quickly to secure the best available rates in your region.

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 (kWh) you contribute. This credit system works like a bank account where you can store energy value for later use.

Each month, your utility company calculates the difference between the electricity you used and the solar energy you exported to the grid. Any excess credits roll over month to month and year to year for up to 20 years, giving you long-term flexibility to use your stored energy value. However, you won’t receive cash payments for unused credits. All New York homeowners with solar systems are eligible for net metering, though you’ll pay a monthly Contribution Benefits Charge (CBC) that varies by utility company – ranging from $0.85 to $1.45 per kilowatt of your system’s capacity. For example, if you have a 10 kW system with National Grid, you’d pay an additional $14.50 monthly fee. The type of credit you receive (per kWh or monetary) depends on whether you’re on a time-of-use rate schedule with your utility.