New York 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. It’s important to note that this is a non-refundable credit, meaning it can only reduce your New York State tax liability to zero—it won’t result in a refund. However, if your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to five years, giving you flexibility to capture the full value over time.

New York’s Property Tax Exemption protects homeowners from paying higher property taxes when they add solar panels or other qualifying renewable energy systems to their home. When you install solar, 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 renewable energy system must be constructed between January 1, 1991 and January 1, 2030. The exemption covers solar panels, wind systems, battery storage, and several other clean energy technologies. However, this is a local option program—your county, city, town, village, or school district must choose to allow it. Some jurisdictions have opted out or may require you to enter a payment-in-lieu-of-taxes (PILOT) agreement instead. It’s important to check with your local tax assessor to confirm the exemption is available in your area and understand any local requirements before moving forward with your installation.

New York’s Sales Tax Exemption eliminates state sales tax on 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’ll save money upfront when you buy your solar equipment and have it installed.

The exemption from local sales taxes varies by county and city. Many counties—including Albany, Broome, Erie, Nassau, Suffolk, and all five boroughs of New York City—provide full exemption from local sales taxes (typically 3-4%). However, some counties like Allegany, Cattaraugus, and Monroe still charge their local sales tax rates on solar purchases. The specific tax rate you’ll pay depends on where your home is located, so it’s worth checking your county’s status to understand your total savings.

This exemption applies to residential solar energy systems equipment and installation services. There are no income requirements or application deadlines—the exemption is automatically applied at the point of sale. The exemption remains in effect indefinitely unless changed by future legislation, so homeowners can take advantage of these savings whenever they’re ready to go solar.

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 operates through a public-private partnership designed to make solar energy more accessible and affordable across the state by offering upfront cash incentives that reduce your installation costs.

The incentive amounts vary by region and are structured using a “megawatt block” system, which means the incentive level decreases as more solar capacity is installed in each area. New York is divided into three main regions (Con Edison, Long Island, and Upstate), and each region has different incentive rates that are updated in real-time through online dashboards. The program is available for residential homes, commercial properties, and community solar projects. Incentives remain available until all allocated megawatts within each block are fully subscribed, so the amount you receive depends on when you apply and which region you’re in. Additional incentive “adders” may be available for qualifying projects, such as those serving low-to-moderate income communities or projects that meet prevailing wage requirements.

To participate, you’ll need to work with a NY-Sun participating contractor who can help you navigate the application process and determine your specific incentive level. The program is designed to phase out over time as solar becomes more cost-effective, so acting sooner rather than later may help you secure higher incentive rates before your region’s block fills up.

Net metering in New York allows you to receive credit for the excess solar energy your system sends to the grid. When your solar panels produce more electricity than your home uses, that surplus energy flows back to the utility grid, and you receive credits on your electric bill. Each month, your solar production is netted against your total electricity consumption, meaning you only pay for the difference between what you used and what you generated.

New York offers 1:1 net metering, which means you receive full retail rate credit for every kilowatt-hour (kWh) you export to the grid. If you generate more than you use in a given month, those excess credits roll over to future months as either per-kWh credits (for standard rate schedules) or monetary credits (for time-of-use rate schedules). These credits continue rolling over month to month and year to year for 20 years, though they will not be paid out as a cash refund. All solar customers in New York pay a monthly Contribution Benefits Charge (CBC), which ranges from $0.85 to $1.45 per kW-DC of your system size, depending on your utility provider. For example, a typical 10 kW system would pay between $8.50 and $14.50 per month in CBC fees.

Net metering is available to all residential solar customers across New York’s major utility territories, including Central Hudson, Orange & Rockland, National Grid, Con Edison, NYSEG, RGE, and PSEG Long Island. There are no application deadlines, and the program remains available to new solar customers. This incentive works automatically once your solar system is interconnected with the grid, helping you maximize the value of your solar investment throughout the year.