Syracuse, 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 for up to five years. This carryover feature ensures you can capture the full value of the credit even if your tax liability in the installation year is less than the credit amount. To claim this benefit, you’ll need to complete Form IT-255 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 solar energy 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 directly 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. The exemption applies to general property taxes but does not cover special assessments or 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 paying the 4% New York State sales tax and the additional 3/8% Metropolitan Commuter Transportation District (MCTD) tax that applies in some areas. This means you won’t pay these state-level taxes when buying and installing your solar equipment.

Local sales tax exemptions vary by county and city. Many jurisdictions—including all of New York City, Nassau County, Suffolk County, Erie County, and dozens of others—have enacted full local exemptions, meaning you pay 0% sales tax on your solar installation. However, some counties and cities have not adopted the local exemption, so you may still pay local sales tax rates ranging from 1.5% to 4.5% depending on your location. For example, Allegany County charges 4.5% local tax, while Albany County charges nothing.

All New York homeowners purchasing residential solar energy systems are eligible for the state-level exemption. There are no income requirements, system size limits, or application deadlines—the exemption applies automatically at the time of purchase. Your solar installer should apply this exemption directly to your invoice, so you won’t need to file for a refund later. To confirm whether your specific county or city provides the local exemption, check with your installer or review the current rates published by the New York State Department of Taxation and Finance.

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 is part of a coordinated effort involving multiple state agencies to make solar energy more accessible and affordable across New York State. The incentive amounts vary by region (Con Edison, Long Island, and Upstate areas) and are structured in blocks, with incentive levels decreasing as each block of megawatts gets fully subscribed.

The program uses a “MW Block” structure, meaning a set amount of funding is allocated to each region and divided into blocks based on megawatts of solar capacity. As more people in your area install solar, the blocks fill up and incentive rates step down to lower levels. This design encourages early adoption while gradually phasing out incentives as the solar market becomes self-sustaining. Homeowners should check the real-time dashboards for their specific region to see current incentive levels, as these change based on how much solar capacity has been installed. The program serves residential homes, multifamily properties, businesses, and community solar projects, with specific incentive rates for each sector. To participate, you’ll need to work with a NY-Sun participating contractor who can help you navigate the application process and ensure your project qualifies for the current incentive level.

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 send to the grid. Any excess credits roll over month to month and year to year for up to 20 years, though they will not be paid out as cash. The type of credit you receive depends on your rate schedule: if you’re on a standard rate plan, you’ll receive per-kWh credits; if you’re on a time-of-use (TOU) rate schedule, you’ll receive monetary credits. 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. For example, if you have a 10 kW system with National Grid, you would pay approximately $14.50 per month in CBC fees.

Net metering is available to all residential solar customers in New York who are served by the state’s major utilities, including Central Hudson, Orange & Rockland, National Grid, Con Edison, NYSEG, RGE, and PSEG Long Island. There are no application deadlines, as net metering is an ongoing program required by state law. The 20-year credit expiration period begins when your system is interconnected to the grid, giving you two decades to use the credits you accumulate from your solar production.