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: by purchasing solar equipment outright, entering into a lease agreement for solar equipment, or signing a power purchase agreement (PPA) that spans at least 10 years for solar-generated electricity. The credit is non-refundable, meaning it can only reduce your tax liability to zero, but any unused portion can be carried forward for up to five years. This makes it valuable even if you don’t owe enough taxes in the first year to use the full credit amount.

To claim this benefit, you’ll need to file Form IT-255 with your New York State tax return. Since this is a state tax credit, it works alongside federal solar incentives to further reduce your overall solar investment costs.

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 exemption covers the full amount of any assessed value increase caused by installing solar, wind, micro-hydroelectric, fuel cell, energy storage, or other qualifying systems. For example, if solar panels add $15,000 to your home’s assessed value, you won’t pay property taxes on that $15,000 increase for 15 years. The exemption applies to all local property taxes including county, city, town, village, and school district taxes, though you’ll still be responsible for any special assessments or levies.

To qualify, your renewable energy system must be constructed between January 1, 1991 and January 1, 2030. However, there’s an important catch: this exemption is subject to “local option,” meaning your local government (county, city, town, village, or school district) can choose to opt out of offering this benefit. You should check with your local tax assessor to confirm the exemption is available in your area. Additionally, some local governments may 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.

New York’s Sales Tax Exemption for residential solar energy systems removes state sales tax from solar equipment purchases and installations. This exemption eliminates the standard 4% New York State sales tax and the additional 3/8% tax in the Metropolitan Commuter Transportation District (MCTD), which includes New York City and surrounding areas.

The financial benefit varies by location since local tax exemptions depend on individual county and city decisions. In areas that provide full exemption (like Albany County, Erie County, Nassau County, Suffolk County, and New York City), homeowners pay zero sales tax on their solar system. However, in counties that haven’t enacted the local exemption, homeowners still pay local sales tax rates ranging from 1.5% to 4.5%. For example, a $20,000 solar system in Nassau County would save $875 in total taxes, while the same system in Monroe County would save $800 in state taxes but still owe $800 in local taxes.

This exemption applies to residential solar energy systems equipment and installation services, with no income limits or system size restrictions mentioned. The benefit has been available since 2005 and appears to be ongoing with no specified end date. Homeowners should verify their local jurisdiction’s participation in the exemption, as tax rates and exemption status can change over time.

The NY-Sun Program is New York State’s comprehensive solar incentive initiative that provides financial support to help homeowners, businesses, and communities install solar panel systems. Administered by NYSERDA (New York State Energy Research and Development Authority) in partnership with local utilities, this program offers direct cash incentives to reduce the upfront cost of going solar across three main regions: Con Edison territory, Long Island, and Upstate New York.

The program uses a unique “MW Block” structure where incentive amounts decrease over time as each region reaches certain solar installation milestones. This means early adopters receive higher incentive payments, while later participants receive smaller amounts as the solar market becomes more self-sustaining. The exact dollar amount varies by region and installation size, with real-time incentive levels available through online dashboards. The program is designed to eventually phase out incentives entirely once New York’s solar market can thrive without government support, so homeowners interested in solar should act sooner rather than later to secure the best available rates.

Net metering in New York allows homeowners with solar panels to receive credit for excess electricity their system produces and sends back to the grid. When your solar panels generate more power than your home uses, that extra electricity flows to the grid and you receive a 1:1 credit – meaning you get full retail value for every kilowatt-hour you export. These credits then offset your future electricity usage 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 kilowatt of your system’s capacity. For example, if you have a 10 kW system with National Grid, you’d pay $14.50 per month in CBC fees. Your net metering credits roll over month to month and year to year for up to 20 years, giving you long-term value from your solar investment. The utility will not issue cash payments for excess credits – they remain as energy credits on your account until used or until they expire after 20 years.