Schenectady, NY Solar Panels

The New York Solar Equipment Tax Credit is a state tax credit that rewards homeowners who invest in solar energy systems 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 10-year or longer power purchase agreement for solar energy. The solar system must use solar radiation to produce energy for heating, cooling, hot water, or electricity at your principal New York State residence.

The credit equals 25% of your qualified solar energy system equipment costs, with a maximum credit of $5,000. This is a non-refundable credit, meaning it can reduce your New York State tax liability to zero, but you won’t receive any excess as a cash refund. However, if your credit exceeds your tax liability in a given year, you can carry forward the unused portion for up to five years, giving you flexibility to capture the full value of your investment over time.

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 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 other eligible energy system must be constructed between January 1, 1991 and January 1, 2030. The exemption is available for solar energy systems, wind energy systems, and several other renewable technologies including energy storage systems. However, this is a local option program, which means your county, city, town, village, or school district can choose whether to offer it. You’ll need to check with your local tax assessor to confirm the exemption is available in your area.

It’s important to know that local governments may require you to enter into a payment-in-lieu-of-taxes (PILOT) agreement, which could require annual payments up to what you would have paid without the exemption. If you’re planning to install a system, send written notice to your local jurisdiction referencing RPTL § 487(9)—if they don’t respond within 60 days stating their intent to require a PILOT agreement, your project won’t be obligated to make those payments. The exemption covers general property taxes but you’ll still be responsible for special assessments and special ad valorem levies.

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 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 won’t pay these state-level taxes when buying and installing your solar equipment.

The exemption also applies to local sales taxes in many New York counties and cities, though this varies by location. Many areas—including all of New York City, Nassau County, Suffolk County, Erie County, and dozens of other jurisdictions—provide full exemption from both state and local sales taxes. However, some counties still charge local sales tax rates ranging from 1.5% to 4.5%. For example, Monroe County charges 4% local tax, while Albany County provides a complete exemption. The total savings depends on your specific location and the cost of your solar system.

This exemption applies to residential solar energy systems equipment purchased and installed in New York State. There are no income requirements or application processes—the exemption is automatically applied at the point of sale by qualified solar installers. The exemption has no expiration date and remains available for all eligible residential solar installations. Your solar installer should handle the tax exemption details during your purchase, ensuring you receive the proper tax treatment based on your 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 panels. This program is part of a coordinated effort to make solar energy more affordable and accessible across the state, with the goal of building a self-sustaining solar market. The incentive amounts vary by region (Con Edison, Long Island, and Upstate areas) and are structured in blocks based on megawatts (MW) of solar capacity.

The program uses a declining block structure, which means incentive levels decrease as more solar is installed in each region. Specific dollar amounts per watt depend on your location, project type (residential, commercial, or community solar), and which block is currently open in your area. You can check real-time incentive levels through the MW Block Dashboards on the NYSERDA website. Incentives remain available until all allocated megawatts in each block are fully subscribed, so acting sooner rather than later can help you secure higher incentive rates. The program is designed to phase out over time as solar becomes more economically viable on its own, making it important to explore your options while funding is still available. Additional adders may be available for projects that meet specific criteria, such as community solar projects or those serving disadvantaged communities.

Net metering in New York allows you to receive credit for the excess solar energy your system sends back to the electric grid. When your solar panels produce 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 at a 1:1 rate, meaning you receive full retail value for every kilowatt-hour you send to the grid.

The financial benefit works through a monthly credit system. If you’re on a standard rate schedule, excess credits are tracked as per-kilowatt-hour amounts. If you’re on a time-of-use (TOU) rate schedule, credits are tracked as monetary amounts. These credits roll over month to month and year to year for 20 years, helping offset future electric bills during months when your solar production is lower. However, you should be aware that all utilities in New York charge a monthly Contribution Benefits Charge (CBC) fee, which ranges from $0.85 to $1.45 per kilowatt of your system’s DC capacity, depending on your utility provider.

Net metering is available to 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. One important consideration: after 20 years, any remaining credits will expire, and utilities will not issue checks for unused credit balances. This makes it beneficial to size your solar system appropriately to match your actual energy needs over time.