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New York Solar Incentives for 2025

New York offers six excellent solar incentives that help make going solar more affordable. Keep reading to learn how to save on your NY solar panel system costs.

Written by
Alexis Carthan
Written by
Alexis Carthan
Updated 03/13/2025

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For nearly five decades, New York has focused on expanding clean energy usage, with solar power taking center stage. The state provides solar incentives, such as the equipment tax credit and net metering, to encourage residents to go green. These incentives significantly lower upfront costs and offer long-term savings.

In this guide, we break down the best solar incentives available in New York. We explore local, state, and federal options, offer instructions on how to apply, and recommend leading solar providers in New York.

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What Solar Tax Credits and Rebates Does New York Offer?

New York’s clean energy initiatives began as early as 1975. According to the Solar Energy Industries Association, New York consistently ranks as one of the top 10 solar markets in the United States. Its Clean Energy Standard initiative aims to get 70% of the state’s energy from renewable sources by 2030. Although large-scale solar growth has been slow, the state excels with small-scale projects, which include rooftop solar installations. The U.S. Energy Information Administration (EIA) reported that in 2022, New York ranked third in the nation in electricity generation from small-scale projects. 

New York offers several solar incentives and credits to encourage continued solar energy growth to reduce homeowners’ solar installation costs. Here’s an overview of the incentives available to New York residents.

IncentiveTypeWhere It Comes FromWhat It Provides
Federal solar tax creditTax creditFederalLets you claim up to 30% of solar system costs on federal income taxes
Net meteringBill creditStateOffers bill credits in exchange for your excess generated solar energy
NY State Solar Energy System Equipment Tax CreditTax creditStateReceive a 25% credit on your solar energy system equipment costs (up to $5,000)
NY-Sun Initiative Megawatt Block ProgramRebateStateReceive $0.20–$0.50 per kW rebates for residential solar panel systems
Solar Project State Sales Tax ExemptionSales tax creditStateExempts New York’s 4% sales and use tax from your solar system purchase
Clean Energy Systems Property Tax ExemptionProperty tax creditLocalExempts 100% of increased property taxes from a solar installation for 15 years

Can You Qualify for a Federal Solar Tax Credit in New York?

Most New Yorkers can take advantage of the federal solar tax credit, also known as the Investment Tax Credit (ITC), which allows homeowners to deduct 30% of their solar installation and equipment costs from their federal taxes. Originally introduced in 2005 and extended under the Inflation Reduction Act (IRA) in 2022, the ITC will remain at 30% through 2032 before decreasing to 26% in 2033 and 22% in 2034, with expiration set for 2035 unless Congress renews it. This credit also applies to stand-alone solar batteries with a capacity of at least 3 kilowatt-hours (kWh), making it a valuable incentive for homeowners investing in energy storage.

To qualify, you must purchase your solar system outright or finance it with a solar loan, as leasing or entering a power purchase agreement (PPA) disqualifies you from claiming the credit. Unlike a rebate or direct payment, this incentive reduces the amount of federal income tax owed, and any unused portion can roll over to the next tax year, maximizing long-term savings.

Does New York Offer Net Metering?

The New York State Public Service Commission (PSC) enacted net metering in 1997 primarily for residential solar customers. Net metering allows solar owners to exchange excess solar power back to electric companies for credits on their electric bills. In New York, net-metering policies apply to residential systems up to 25 kilowatts (kW) of capacity. Although introduced statewide, net-metering policies vary between utility companies. Some of the top programs include Consolidated Edison (Con Edison), National Grid, and PSE&G

In recent years, New York has introduced several major changes to its net metering policy. In 2022, the state introduced two net-metering options for new solar customers: Phase One Net Metering and the Value of Distributed Energy Resources (VDER). Both options include a Customer Benefit Contribution (CBC) of $0.69–$1.09 per kW per month, which varies based on system size and utility provider. Here’s an overview of each option:

  • Phase One Net Metering: This version offers a more traditional 1:1 credit for excess solar energy. You’ll earn one credit equal to one kilowatt-hour (kWh) of electricity. Payout rates vary by utility company. No end date is set, but this program will eventually be phased out. 
  • Value of Distributed Energy Resources (VDER): VDER, or Value Stock, offers compensation based on several factors beyond the exchanged energy. Additional factors include the environmental value of solar electricity, the wholesale electricity price, and how the exchanged energy helps reduce power demand at the time. It’s more complicated than the Phase One Net Metering program, but it will be in place for the foreseeable future.

Other Ways To Save on Solar in New York

New Yorkers can extend their solar savings with the following state solar incentives and credits.

NY State Solar Energy System Equipment Tax Credit

The NY State Solar Energy System Equipment Tax Credit equals 25% of your qualified solar energy system equipment expenditures up to $5,000. For example, investing $20,000 toward qualifying solar equipment can get you a $5,000 (25%) state solar tax credit.

You’re able to claim this credit if you do the following:

  • Purchase solar system equipment.
  • Enter into a written agreement to lease solar system equipment.
  • Enter into a written agreement that spans at least 10 years for the purchase of power generated by solar energy system equipment not owned by you.

NY-Sun Initiative Megawatt Block Program

Run by the New York State Energy Research and Development Authority (NYSERDA), the NY-Sun Initiative Megawatt Block Incentive offers upfront dollars-per-watt rebates for residential solar panel systems. The NY-Sun program divides the state into regions based on utility providers. These regions include Con Edison, PSE&G Long Island, and all remaining areas under Upstate. Your system must be under 25 kW and installed by a NY-Sun-approved contractor to qualify for this incentive.

NY-Sun assigns a certain number of incentives to each region. It then divides each region into blocks and assigns a megawatt (MW) limit for these incentives. Once a block reaches this limit, the incentive is no longer available.

Home Solar Project State Sales Tax Exemption

New York exempts the state’s 4% sales and use tax for home solar system installations. However, this exemption only applies to state sales taxes. You may be subject to local sales tax with your solar purchase. Certain areas, including New York City, offer city-specific exemptions for local taxes. We recommend checking the New York Department of Taxation and Finance for a full list of local tax exemptions.

Clean Energy Systems Property Tax Exemption

The Clean Energy Systems Exemption eliminates your property tax increases due to solar upgrades. Typically, solar systems increase your property value, resulting in higher property taxes. However, this incentive removes 100% of these increased taxes for up to 15 years.


How Much Do Solar Panels Cost in New York?

The average cost of a solar panel system in New York is around $14,932 before applying any federal or state incentives. With the 30% federal solar tax credit, homeowners can save over $4,000, and potential savings increase with larger system sizes.

When considering solar, it’s essential to choose the right financing option. Here are some common ways to pay for a solar panel system:

  • Cash purchase: Paying upfront provides the highest long-term savings and fastest return on investment.
  • Solar loan: Allows homeowners to finance solar with little to no upfront cost while still benefiting from tax credits and rebates.
  • Solar lease: A third-party company owns the system while homeowners pay a fixed monthly fee for electricity.
  • Power purchase agreement (PPA): Similar to a lease, but instead of a fixed fee, homeowners pay for the power the system generates at a predetermined rate.

How To Apply for Solar Incentives in New York

We recommend working with your solar energy provider to review the available solar incentives and get guidance on how to apply. Here’s a quick overview of each application process to help you get started.

Federal tax credit

You must complete and file IRS Form 5695 to claim the federal tax credit. The IRS website provides detailed instructions. We recommend working with a tax professional to help you complete the form correctly.

Net metering

You should contact your utility company for details and an application for its net metering program.

System equipment tax credit

You must complete and file Form IT-255 to receive the equipment tax credit. The New York Department of Taxation and Finance offers full instructions on the process.

NY-Sun Megawatt Block Program

Visit the NY-Sun Initiative website for details on participating solar contractors and programs available in each region.

State sales tax exemption

The New York Department of Taxation and Finance offers instructions on form submission for your solar contractor and system owners.

Property tax exemption

You must complete and submit Form RP-487 for the exemption. The New York Department of Taxation and Finance provides full instructions on its website.


New York Solar Companies We Recommend

We’ve provided a list of our picks for top New York solar companies to assist in your decision-making process.

  • Sunrun: Sunrun offers comprehensive solar leasing options, including a 25-year performance guarantee and protection for panel damage or theft. For more details, read our complete analysis of Sunrun.
  • Momentum Solar: Momentum Solar completes installations with its in-house team and assists with solar incentive applications. Read our detailed review of Momentum Solar.

Is Going Solar in New York Worth It?

Yes, it’s worth it to go solar in New York. It has a higher electricity rate than most of the country. According to the EIA, NY residents paid 22.52 cents per kilowatt-hour (kWh) for electricity in 2023, more than 43% higher than the national average. Moving to renewable energy helps you reduce your reliance on grid-tied electricity, effectively lowering your energy costs. With most solar panels lasting 25 years or longer, you benefit from two decades or more of energy savings. 

To maximize your installation savings, we recommend applying for the available federal, state, and local incentives in New York. You should check for additional local sales tax exemptions for your area. Your solar installer can help you maximize your savings and apply for incentives. Remember that your chosen solar financing option also affects your qualifications, so consider these options when investing in a solar panel system.


The Process of Going Solar in New York

Before exploring New York’s solar incentives and financing options, it’s helpful to understand the solar installation process. Here’s what to expect:

  1. Consultation: Start by reaching out to multiple solar companies to evaluate your home’s solar potential. Installers will use satellite imagery and in-person assessments to analyze your roof’s sun exposure, shading, and how many solar panels you need. This process typically takes a few days.
  2. System design: After the site assessment, your installer will design a system tailored to your energy consumption, roof space, and budget. You’ll receive recommendations for solar panels, inverters, and battery storage, with the design phase usually taking one to two weeks.
  3. Permitting and approvals: Your installer will handle local zoning requirements, HOA regulations, and utility interconnection applications. Permitting timelines vary by location but generally take four to eight weeks in New York, depending on utility and municipal approval processes.
  4. Installation: Once permits are approved, the installation process begins. Most residential solar installations are completed in one to two days, typically within one to three months after your initial consultation.
  5. Final Inspection and activation: After installation, your system must pass a final inspection by local authorities and your utility provider before being activated. Your installer will guide you through monitoring your system’s performance, understanding net metering credits, ongoing maintenance, and optimizing energy savings.

FAQ About New York Solar Incentives

Can you get free solar panels in NY?

No, New York does not offer free solar panels. However, you can utilize state and local incentives to help reduce your installation costs. You can also apply for the federal solar credit, which can give you up to 30% back on investment costs.

Does New York have a solar tax credit?

Yes, New York does offer a NY State Solar Energy System Equipment Tax Credit, which provides up to 25% back for residential solar equipment costs. This credit applies to your state taxes to help reduce or eliminate your liability.

Do solar panels increase property taxes in NY?

Yes, solar panels will increase property value in NY. The state government offers a Clean Energy Systems Exemption to eliminate 100% of increased property taxes for residents for 15 years.

Is New York getting rid of net metering?

No, New York isn’t getting rid of net metering. However, state officials are transitioning from a traditional net metering program to a Value of Distributed Energy Resources (VDER) alternative. This method considers other factors, including electricity pricing and energy demand when determining compensation pricing.


Our Rating Methodology

We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

  • Solar equipment, installation, and services (25%)
  • Warranty and performance guarantees (25%)
  • Brand reputation and certifications (15%)
  • Financing options (15%)
  • Experience (10%)
  • Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.

To share feedback or ask a question about this article, send a note to our team at reviews@thisoldhousereviews.com.

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