Poughkeepsie, 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 energy generated by equipment you don’t own. 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 the credit is non-refundable (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 for solar and other renewable energy systems protects homeowners from paying higher property taxes when they add a qualifying system to their home. When you install solar panels, your home’s value typically increases—but with this exemption, your property taxes won’t go up to reflect that added value. The exemption lasts for 15 years from the date your system becomes operational, covering the full increase in your home’s assessed value that’s attributable to the solar installation.

To qualify, your solar system must be constructed between January 1, 1991 and January 1, 2030. Construction is considered to have begun when you’ve fully executed a contract or interconnection agreement with your utility company (and made any required deposit). This exemption is subject to local option, meaning your county, city, town, village, or school district can choose whether to allow it. It’s important to check with your local tax assessor to confirm the exemption is available in your area. Some jurisdictions may also require you to enter into a payment-in-lieu-of-taxes (PILOT) agreement, though they must notify you of this requirement within 60 days of receiving written notice of your intent to install a qualifying system.

While the exemption protects you from increased general property taxes, you’ll still be responsible for any special assessments or special ad valorem levies on the increased value. The exemption applies automatically to the portion of your home’s value increase that comes from the solar equipment itself. If your solar components also serve as part of your building structure (like solar roof tiles), only the incremental cost above conventional construction materials qualifies for the exemption.

New York’s Sales Tax Exemption eliminates state sales tax on the purchase and installation of residential solar energy systems. Since 2005, homeowners have been exempt from the 4% New York State sales tax and the 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 your solar equipment and have it installed.

The exemption from local sales taxes varies by county and city. Many jurisdictions—including all of New York City, Nassau County, Suffolk County, Erie County, and dozens of other counties—provide full exemption from local sales taxes (typically 3-4.5%). However, some counties have chosen not to adopt the local exemption, meaning you would still pay local sales tax rates ranging from 1.5% to 4.5% in those areas. For example, Monroe County and most of Onondaga County still charge their local rates on solar purchases.

This exemption applies to residential solar energy systems and has no expiration date—it remains in effect as long as state law continues. There are no income requirements or application processes; the tax exemption is automatically applied at the point of sale by your solar installer. When comparing solar quotes, make sure the pricing reflects this tax exemption, as it can save you hundreds or even thousands of dollars depending on your system size and 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 operates through a regional block structure, where the state is divided into three main regions (Con Edison territory, Long Island, and Upstate), each offering incentives that decrease gradually as solar adoption increases in that area.

The program provides upfront cash incentives based on the size of your solar system, measured in dollars per watt. Incentive amounts vary by region and are organized into “blocks” of megawatts—as each block fills up with solar installations, the incentive rate decreases for the next block. You can check real-time incentive levels for your specific region through NY-Sun’s online dashboards. The program is available for residential homes, multifamily properties, businesses, and community solar projects. Additional incentive “adders” may be available for projects that meet specific criteria, such as serving low-to-moderate income communities or projects built with prevailing wage labor. Since incentives decrease as blocks fill up, it’s beneficial to explore solar sooner rather than later to maximize your potential savings.

Net metering in New York allows you to receive credit for the excess solar energy your system produces and sends back to the electric grid. When your solar panels generate more electricity than your home uses, that surplus power flows 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 produced.

New York offers 1:1 net metering across all major utilities, which means you receive full retail rate credit for every kilowatt-hour (kWh) you export to the grid. Any excess credits carry over month to month and year to year for up to 20 years, giving you long-term value from your solar investment. The credit structure varies slightly by utility: if you’re on a standard rate plan, credits roll over as per-kWh amounts, while time-of-use (TOU) rate customers receive monetary credits. It’s important to note that 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 provider. This fee helps support the state’s renewable energy programs.

All residential solar customers in New York with systems connected to one of the state’s investor-owned utilities are eligible for net metering. There are no application deadlines, as this is an ongoing program available to all qualifying solar homeowners. Keep in mind that accumulated credits expire after 20 years, and utilities will not issue checks for unused credits—so it’s beneficial to size your system appropriately for your energy needs to maximize the value of your solar investment.