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 complete Form IT-255 when filing your New York 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 financial benefit varies based on your home’s tax assessment, but it can save you hundreds to thousands of dollars annually. For example, if solar panels increase your home’s assessed value by $20,000 and your property tax rate is 2%, you would save $400 per year in property taxes. The exemption applies to solar energy systems, wind systems, and several other renewable energy technologies including battery storage systems.

To qualify, your renewable energy system must be constructed between January 1, 1991 and January 1, 2030. There are no income requirements or property location restrictions. However, this exemption is subject to “local option,” meaning your county, city, town, village, or school district can choose to opt out of offering this benefit. Some jurisdictions may also require you to enter into a payment-in-lieu-of-taxes (PILOT) agreement, though they must notify you within 60 days of receiving written notice of your intent to install a system.

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 local taxes ranging from 1.5% to 4.5%. For example, residents in Albany County, Erie County, Nassau County, Suffolk County, and New York City pay no sales tax on solar equipment, while residents in areas like Allegany County still pay 4.5% in local taxes. The exemption applies to both the solar equipment itself and professional installation services.

This incentive is available to all New York homeowners purchasing residential solar energy systems, with no income restrictions or application process required. The tax exemption has been in effect since 2005 and currently has no expiration date. When purchasing your solar system, the tax exemption is automatically applied at the point of sale, so you’ll see the savings immediately rather than waiting for a rebate or tax credit.

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 help offset the upfront costs of installing solar panels on your property.

The program uses a unique “MW Block” structure that divides New York 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 material doesn’t specify exact dollar amounts, incentives are allocated in megawatt blocks until fully subscribed in each region. The program covers residential homes, multifamily properties, and various commercial projects, with real-time dashboards showing current incentive levels and availability in your specific area.

An important consideration for homeowners is that NY-Sun is designed to phase out incentives as the solar market becomes self-sustaining, meaning incentive amounts will decrease and eventually end as each regional block fills up. This creates a “first-come, first-served” situation where acting sooner rather than later could secure higher incentive amounts. To get the most current incentive rates and availability for your specific location, you’ll need to check the appropriate regional dashboard, as rates and availability change in real-time based on program participation.

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 export. This credit can then be used to offset electricity you draw 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 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 kW of your system’s capacity, depending on your utility provider. For example, if you have a 10 kW 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. You won’t receive cash payments for excess credits – they can only be used to offset future electricity bills.

This program is available to residential solar customers across New York state through all major utilities including Con Edison, National Grid, NYSEG, RGE, Central Hudson, Orange & Rockland, and PSEG Long Island. The specific CBC fee and credit structure may vary slightly depending on whether you’re on a time-of-use rate schedule, so it’s important to check with your utility company about the exact terms that apply to your situation.