Newburgh, NY Solar Panels

The New York Solar Energy System Equipment Credit is a state tax credit that rewards homeowners who invest in solar energy for their primary residence. You can claim this credit if you purchase solar equipment, lease solar equipment under a written agreement, or enter into a long-term power purchase agreement (at least 10 years) for solar-generated electricity. The solar system must be installed at your principal residence in New York State and used to produce energy for heating, cooling, hot water, or electricity.

This credit is worth 25% of your qualified solar energy system equipment costs, up to a maximum of $5,000. While this is a non-refundable credit (meaning it can only reduce your tax liability to zero, not generate a refund), any unused portion can be carried forward and applied to your state taxes for up to five years. To claim this benefit, you’ll need to complete Form IT-255, Claim for Solar Energy System Equipment, when filing your New York State income tax return.

New York’s Property Tax Exemption protects homeowners from paying higher property taxes when they add solar panels or other renewable energy systems to their home. When you install solar, your home’s assessed value typically increases—but with this exemption, you won’t pay property taxes on that added value for 15 years. This means your property tax bill stays the same as it was before installation, even though your home is now worth more.

To qualify, your solar or renewable energy system must be constructed between January 1, 1991 and January 1, 2030. The exemption is available for solar panels, wind systems, battery storage, and several other clean energy technologies. However, this is a local option program—your county, city, town, village, or school district must choose to allow it. Most jurisdictions in New York participate, but you should verify with your local tax assessor that the exemption is available in your area.

One important consideration: local governments can require you to sign a Payment in Lieu of Taxes (PILOT) agreement, which could reduce or eliminate your tax savings. If you’re planning to install solar, notify your local government in writing with explicit reference to RPTL § 487(9). Unless they respond within 60 days stating they’ll require a PILOT agreement, your project won’t be obligated to make these payments. The exemption begins once your system is operational and lasts for 15 years.

New York’s Sales Tax Exemption removes state sales tax from the purchase and installation of residential solar energy systems. Since 2005, homeowners have been exempt from paying the 4% New York State sales tax and the additional 3/8% Metropolitan Commuter Transportation District (MCTD) tax that applies in the New York City metro area. This means you’ll save money upfront when you buy and install your solar system.

The exemption from local sales taxes varies by county and city. Many counties—including Albany, Broome, Erie, Nassau, Suffolk, and all five boroughs of New York City—provide full exemption from both state and local sales taxes. However, some counties like Allegany, Monroe, and Niagara still charge their local sales tax rates (typically 4%) even though the state portion is exempt. A few specific cities within otherwise exempt counties, such as Rome, Utica, and Glens Falls, do charge reduced local rates. The total savings depends on your location, but in fully exempt areas, you could save 4% to 4.375% on your entire solar system cost.

This exemption applies specifically to residential solar energy systems equipment and their installation. There are no income requirements, system size limits, or application deadlines—the exemption is automatically applied at the point of sale. Your solar installer should handle this exemption when processing your purchase, so you won’t need to file any additional paperwork. Be sure to confirm with your installer that they’re applying the correct exemption based on your specific county and city location.

The NY-Sun Program is a statewide initiative administered by NYSERDA (New York State Energy Research and Development Authority) that provides financial incentives to help New York homeowners, businesses, and organizations install solar panel systems. This program offers upfront cash incentives based on the size of your solar installation, measured in watts or kilowatts. The incentive amounts vary by region across New York State and are structured in blocks—as more solar gets installed in your area, the incentive levels gradually decrease to reflect the growing solar market.

The program divides New York into three main regions: Con Edison territory, Long Island, and Upstate New York, with each region having different incentive rates. Incentives are available for residential homes, commercial properties, multifamily buildings, and community solar projects. The specific dollar amount you can receive depends on your location, the size of your system, and which incentive block is currently open in your region. You can check real-time incentive levels through the MW Block Dashboards on the NYSERDA website.

To participate, you’ll need to work with a NY-Sun participating contractor who will help you navigate the application process and ensure your system meets program requirements. The incentives are available on a first-come, first-served basis until each block’s allocated megawatts are fully subscribed, so timing matters. There’s no specific deadline, but incentive levels decrease as blocks fill up, and the program is designed to eventually phase out as New York’s solar market becomes self-sustaining. Additional incentive adders may be available for qualifying projects, such as those serving affordable housing or meeting prevailing wage requirements.

Net metering in New York allows you to receive credit for the excess solar energy your system sends to the electric grid. When your solar panels produce more electricity than your home uses, that surplus power flows back to the grid, and you receive credits on your utility bill. Each month, your exported solar production is netted against your total electricity consumption, meaning you only pay for the difference between what you used and what you generated.

The value of your credits depends on your rate schedule. If you’re on a standard (non-time-of-use) rate plan, you’ll receive credits measured in kilowatt-hours that can offset future electricity usage. If you’re on a time-of-use rate schedule, you’ll receive monetary credits instead. These credits roll over month to month and year to year for 20 years, though they will expire after that period and won’t be paid out as a cash refund. All New York solar customers pay a monthly Contribution Benefits Charge (CBC), which ranges from $0.85 to $1.45 per kilowatt of your system’s DC capacity, depending on your utility company. For example, a typical 10 kW system would incur a monthly fee between $8.50 and $14.50.

Net metering is available to residential solar customers across all major New York utilities, including Central Hudson, Orange & Rockland, National Grid, Con Edison, NYSEG, RGE, and PSEG Long Island. There are no application deadlines, as this is an ongoing program for solar homeowners. The key consideration is understanding that while net metering provides valuable bill credits, you’ll want to size your system appropriately since excess credits expire after 20 years rather than being paid out in cash.