If you think solar panels are all about sunlight, you might think going solar in New York is a fool’s game. While solar panels certainly need sunlight to generate electricity, luckily for New Yorkers, the benefits of solar also have a lot to do with available incentives and the price of electricity. With some of the highest electricity prices and strongest solar incentives in the country, New Yorkers could save money when they go solar.
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Does Solar Make Sense in New York?
The decision to install solar panels at home typically comes down to savings for your specific household. While the decision is specific to your own circumstances, New York has some statewide factors that make solar work for more people. Those incentives and high electricity prices have pushed New York into the top 10 for total solar capacity installed, according to the Solar Energy Industries Association.
Here’s the statewide factors that can impact your decisions to go solar.
Price of electricity
The average electricity price in New York is high. According to the US Energy Information Administration, the average cost of electricity was 22.24 cents/kilowatt-hour in 2023. That beats the national average of 16 cents/kWh and the average price in all but four of the 48 contiguous United States.
While it’s not a guarantee that solar panels will be a good deal for you, in general, the more expensive your utility’s electricity, the more you can save by avoiding it.
Price of solar
The cost of solar varies within any given state and the best way to nail down the price of solar for your home is to get quotes from reputable companies.
One national average estimate puts the cost at $3.24 per watt of installed solar capacity. At that price, you’d pay $16,200 for a 5 kilowatt system before incentives.
Credit: Solar Energy Industries Association
Available sunlight
While it’s not the most important factor in going solar, available sunlight does have a direct effect on how much electricity your panels produce. New York isn’t the sunniest place — with just around 4 peak sun hours — but solar panels are still widely installed there. It likely has more to do with the other factors on this list and the incentives that follow than available sun.
Outages
Sometimes the decision to go solar isn’t actually about savings, but more about reliability. With a battery attached solar panels can keep the lights on when the grid goes down.
The US Energy Information Administration reports that in 2022, the average New Yorker lost power for 203 minutes. (Some customers may not have lost power at all, while others may have for longer.)
While other states have more unreliable power, solar might be worth it in New York if even a small outage will be a major inconvenience.
Solar Incentives in New York
From the federal to the local, governments can incentivize (or disincentivize) solar adoption. New York has one of the stronger sets of solar incentives in place as the state moves toward its goal of 10,000 megawatts of solar installed by 2030.
Federal tax credit
While it’s not specific to New York, the federal solar tax credit, known as the Residential Clean Energy Credit, can effectively reduce the cost of going solar by 30%. If you own your solar panels, you can claim a tax credit of 30% the cost of going solar in the year they’re installed. That credit is applied to federal income taxes you owe or have paid that year. You need to have a tax burden to take advantage of the incentive, but if you don’t owe enough taxes, you can roll over any unclaimed credit to subsequent years.
There are some restrictions on system eligibility (e.g. You can’t claim it for solar panels on rental properties), so be sure to speak with your tax advisors before counting on the credit.
If you’re leasing solar panels, you won’t be able to claim the tax credit. The company that owns the panels will, though the tax credit still plays a role in keeping costs lower for the company and you.
Credit: SEIA
State tax credit
New York is one of the few states that offers a state tax credit: 25% of the cost up to $5,000. Unlike the federal version, which can only be claimed by the owner of the panels, New York’s tax credit can be claimed by homeowners who lease their panels, too.
NY-SUN/NYSERDA incentive
New Yorkers may also qualify for the NY-Sun program, an incentive the state offers directly to contractors as a way to keep costs down. It’s paid out by region and block of the program. Solar projects in the upstate and ConEdison regions can have the cost of their solar reduced by $.20/watt, according to the New York State Energy Research and Development Authority’s program dashboard.
Net metering
When your solar panels are generating electricity, you might not always be home to use it. You can store that energy in a battery (an increasingly popular option), but otherwise that electricity would just flow to the grid. Net metering (or its close cousin, net billing) means you can earn credits on your bill for that electricity.
Most New Yorkers can take advantage of 1-to-1 net metering. For every kilowatt-hour of electricity your solar panels send to the grid, you’ll receive a credit to offset one kilowatt-hour of electricity you consume from the grid.
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Property tax exemption
Adding solar panels to a property typically adds value to it, which can boost property taxes. New York has a property tax exemption, though some cities can opt out of it.
Sales tax exemption
New York provides a sales tax exemption for solar panels.
Solar Payback Period in New York
Your solar payback period is the time it takes for your solar savings to match what you spent on your solar panel installation. To calculate it, simply divide the total cost of going solar after incentives by your monthly or yearly savings.
(Total cost - Incentives) / Annual savings = Solar payback period in years
Let’s say you install a seven kilowatt system at the national average of $3.24 per watt for a total of $22,680. You can claim federal (30%, or $6,804) and state (25%, capped at $5,000) tax credits, which brings your price to $10,876. If you save $100 per month ($1,200 per year), you’ll pay back your solar panels in just over nine years.
$10,876 / $1,200 per year = 9.063 years
Your payback period could be even shorter if the cost of electricity goes up during that time. According to the EIA, while New York’s average rate in 2023 was 22.24 cents/kWh, nine years earlier in 2015, it was 18.54 cents/kWh, a change of about 20 percent.
New York Utilities and Rooftop Solar Panels
Your utility will affect the process and potential savings of going solar in New York. While all the major utilities offer 1-to-1 net metering, they vary in their electricity rates, their fixed fees (parts of the bill that can’t be offset by solar), and their customer benefit contribution fee, an additional fee for utility customers with solar.
| Utility | Fixed Charge (per month) | 2024 CBC Fee (per kW per month) | Avg. electricity rate 2023 (cents per kWh) | Net Metering | Max. size | Max. offset for NY-SUN incentive |
|---|---|---|---|---|---|---|
| National Grid | $17.33 | $1.45 | 16.97 | 1-to-1 | 25 kW | 110% |
| ConEdison | $19.28 | $1.41 | 31.58 | 1-to-1 | 25 kW | 110% |
| Central Hudson Gas & Electric | $19.50 | $1.37 | 25.13 | 1-to-1 | 25 kW | 110% |
| Orange & Rockland | $23.50 | $1.39 | 23.47 | 1-to-1 | 25 kW | 110% |
| New York State Electric & Gas | $19.89 | $0.91 | 15.53 | 1-to-1 | 25 kW | 110% |
Rate and billing information in the above table are subject to change and may not be the most recent figures. Average electricity rate taken from the EIA.
Customer benefit contribution fee
This set fee goes to funding public benefit programs that are typically funded based on electricity consumption-related charges. The rate can change year to year and isn’t locked in based on the year your solar is installed.
The owner of a 10 kW system in National Grid’s service area would pay an additional $14.50 per month in 2024 (10 kW x $1.45). If that rate changed in 2025, they would pay the new per-kW rate. For example, customers of New York State Electric & Gas pay a CBC fee of $0.91 per kW per month in 2024. In 2023, the rate was about $0.70 per kW per month and in 2022 it was about $0.72.
Leasing Solar Panels in New York
New York allows third-party ownership of solar panels, meaning you can lease the panels that go on your roof, instead of buying them. The biggest advantage of leasing solar is avoiding the hefty upfront costs of buying it. When your lease payments are lower than the amount you save on your electric bill, you save money overall, sometimes from the first month.
Palmetto’s third party ownership option, LightReach, is designed to deliver savings in the first month when you lease directly from Palmetto. Especially with third party ownership, you’ll want to know for sure what happens when something goes wrong. The leasing company should handle all maintenance and repairs, as Palmetto does for LightReach customers, since they actually own the panels.
Solar Panel Maintenance in New York
Once solar panels are up and running, they’re generally low maintenance equipment. However, equipment can malfunction and other problems can arise. Make sure you understand how maintenance issues will be handled before you purchase or lease solar panels.
Palmetto offers its customers Palmetto Protect, a solar panel maintenance and monitoring package. Depending on your package, you’ll receive proactive monitoring, and even a performance guarantee.
Solar panels and snow
Three of the four snowiest larger cities in the US (Buffalo, Syracuse, and Rochester) are in New York (and the fourth is just across the border in Erie, Pennsylvania. Thanks, Lake Erie and Ontario!
That doesn’t mean solar panels can’t be useful in those cities. Because solar panels generate a bit of heat during normal operation, snow typically melts off of them faster than other surfaces. For the really heavy lake effect snow, clearing snow with a tool that won’t scratch the panels can boost your solar generation through the winter.
Finding the Best Solar Company in New York
When you go solar, the most important decision you’ll make is which company to work with. But in a crowded playing field, it can be tricky to narrow the field. Doing your research can help.
You’ll want to read reviews and, if possible, speak with neighbors or friends who have experience with the company. In your interactions with the company, make sure you’re able to get all your questions answered and that you’re given time to make the decision on your terms.
If you’re interested in going solar in New York, reach out to a Palmetto solar expert today, or start by estimating your savings.
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Palmetto Reviews
Here are reviews from a few of Palmetto’s satisfied customers.
“Palmetto handled every detail and kept in close contact with me so I was always up to date on the process. Installation was quick. The installation crew was wonderful.” Denise M. (Google Review)
“I went through several quotes for solar panels before landing on Palmetto. Their quote was below other vendors, but it wasn't a decision based on price. I chose them because they explained the product and the process very well. I was then set up with an app for tracking the installation process. I'm so happy I chose a company that cares about customer service!” Jeremy L. (Google Review)
NY Solar Frequently Asked Questions
Are solar panels worth it in New York?
New York is one of the top ten states for solar installations in the nation, according to the Solar Energy Industries Association. Robust state incentives, 1-to-1 net metering, and higher-than-average electricity means the savings calculation pencils out for more people.
Does solar increase your home value in New York?
While it’s hard to say for sure how much solar panels will change the value of any one home, plenty of research has shown that solar panels typically increase the value of your home. In 2022, Rocket Homes found that homes with solar panels sell faster and are more likely to sell for more than asking price.
How much does it cost to go solar in New York?
Solar installations can vary in price depending on where they are, even within a state. According to the Solar Energy Industries Association, residential solar installations cost $3.25 per watt at the start of 2024. Larger solar installations typically have a lower cost per watt than smaller installations. Other factors, like steep roofs, the brand and quality of solar equipment, and whether or not a battery is attached, can affect the price, too.
Does New York have net metering?
Yes. New York’s utilities offer 1-to-1 net metering. This means that when your solar panels generate more electricity than you can use, you’ll send it back to the grid and earn credits on your bill. Under 1-to-1 net metering, each kilowatt-hour you send to the grid offsets one kilowatt-hour of electricity you bought from your utility. If you earn more credits than you can use in a month, they roll over to your next month's bill.
What is the customer benefit contribution fee?
The CBC is a set monthly fee that New Yorkers with solar panels pay based on the size of their solar panel system. The fee can change each year and applies if your solar was installed in 2022 or later.
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Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
Andrew BlokWriter and EditorAndrew has worked as a journalist and writer for four years, over half of those dedicated to covering solar. He currently lives in Tucson, AZ, where you might run into him walking his dog and birding while dodging the heat. He has degrees in English education and journalism.
