New York

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 file Form IT-255 with your New York State tax return.

New York’s Property Tax Exemption for solar energy systems is a state tax benefit that protects homeowners from paying higher property taxes when they install solar panels or other qualifying renewable energy systems. When you add solar to your home, it typically increases your property’s assessed value, but this exemption ensures you won’t pay additional property taxes on that increased value for 15 years.

The financial benefit varies based on your home’s increased value from the solar installation, but it can save you hundreds to thousands of dollars annually in property taxes. For example, if your solar system increases your home’s assessed value by $20,000 and your local property tax rate is 2%, you could save $400 per year in property taxes. The exemption covers solar energy systems, wind energy systems, battery storage systems, and several other renewable energy technologies installed on residential properties.

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 within New York State. 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. It’s important to check with your local tax assessor to confirm the exemption is available in your area before installing your system.

New York’s Sales Tax Exemption for residential solar energy systems helps homeowners save money by eliminating sales tax on solar equipment purchases and installation. This state-level incentive removes the standard 4% New York State sales tax and the additional 3/8% Metropolitan Commuter Transportation District (MCTD) tax that would normally apply to solar purchases.

The financial benefit varies significantly depending on your location within New York. All homeowners avoid the state sales tax, but local sales tax exemptions depend on whether your county or city has chosen to participate in the program. Many areas including New York City, Nassau County, Suffolk County, Erie County, and Westchester County (with some city exceptions) provide full exemption from both state and local sales taxes. However, some counties like Allegany, Monroe, and Onondaga still charge local sales tax rates ranging from 3% to 4.5% on solar purchases. For a typical residential solar system costing $20,000-$30,000, this exemption could save homeowners between $800-$2,400 depending on their location.

This exemption applies specifically to residential solar energy systems equipment and installation services. There are no income requirements or application deadlines – the tax exemption is automatically applied at the point of purchase when you buy qualifying solar equipment. The exemption has been in effect since 2005 and currently has no expiration date, making it a reliable long-term benefit for New York homeowners considering solar energy.

The NY-Sun Program is New York State’s comprehensive solar incentive initiative that provides upfront cash rebates to homeowners who install solar panel systems. This state-funded program is designed to make solar energy more affordable and accessible for all New Yorkers by offering direct financial incentives that reduce the initial cost of going solar.

The program operates through 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 increases. While the source material doesn’t specify exact dollar amounts, incentives are available on a first-come, first-served basis until each region’s allocated megawatts are fully subscribed. The program is administered by NYSERDA in partnership with local utilities and is designed to eventually phase out incentives as the solar market becomes self-sustaining.

Homeowners should know that incentive levels change regularly based on demand and are tracked through real-time dashboards, so acting quickly is important to secure higher rebate amounts. The program covers residential properties and works alongside federal tax credits to maximize savings for New York homeowners making the switch to clean solar energy.

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 offset electricity you use 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 solar 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 solar 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. The utility will not issue cash payments for excess credits – they can only be used to offset future electricity bills.