New York ranks 8th in total installed solar capacity, with strong numbers in both residential solar and commercial solar. The New York solar market has long been a strong US market, with a history of incentives. While utility-scale installations are virtually nonexistent, a strong community solar program has emerged and has driven significant savings for New York homeowners over the last 6 years.
With an average residential electricity rate of nearly 30 cents per kilowatt-hour, going solar offers a significant opportunity to reduce energy costs for homeowners in New York. With financial incentives, local tax exemptions, and creative loan/financing options, New York is poised to remain a solar powerhouse.
Below is a list of some of the incentives available to New York homeowners, and you can find further breakdowns by visiting https://programs.dsireusa.org/system/program/ny.
Table of Contents
Federal Incentives
Federal Investment Tax Credit (ITC)
Commercial solar energy systems installed in New York can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met.
Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026.
Commercial Depreciation
Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years.
The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:
- Project cost = $800,000
- 30% credit = $240,000
- Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000
A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off.
State Incentives & Programs
Sales Tax Exemption
New York granted an exemption from sales and use taxes for solar energy equipment, provided the local jurisdictions enact the exemption. New York has a 4% sales tax, so a system costing $30,000 avoids $1,200 in sales tax. Not all jurisdictions have enacted the exemption; see here for a full list.
New York City also passed its own sales tax exemption to match the state exemption.
Property Tax Exemption
As of 2017, property value increases from installing solar, wind, storage, or other qualified renewable energy equipment are property tax exempt for a period of 15 years. Homeowners will still have to pay their normal property tax, but installing solar won’t increase taxes. However, local jurisdictions are able to negate this exemption by passing their own bill.
New York City also passed its own property tax abatement, giving property owners 5% of the money they spent on the system for 4 years. The abatement has a maximum of $62,500 per year or the amount of the building’s yearly tax liability, whichever is less.
Solar Energy System Equipment Tax Credit
The state offers a personal tax credit of 25% of your qualified solar energy equipment purchase, up to a maximum of $5,000. The credit also has maximum system sizes of 25 kW or 50 kW if the project is owned by a condominium or cooperative housing association.
A system cost of $20,000 or greater would result in the full $5,000 tax credit. Credit can be carried forward for five years if a homeowner isn’t able to claim all the credit in one year.
NY-Sun PV Incentive Program (Megawatt Block Program)
New York’s NY-Sun program is an upfront incentive program offering direct rebates to people choosing to go solar. The program paid directly to the contractor on the front end, reducing the total amount a homeowner or business owner would need to pay. The program has been running since 2014 with various blocks depending on system size and region. Generally, the state was broken up into three territories: Con Edison, Long Island, and Upstate.
For residential, all blocks have been fully allocated and closed in 2025. NYSERDA does not plan to introduce new blocks for standard residential, but is increasing funding for community solar and Solar Energy Equity Framework projects.
The standard residential blocks ended at a value of $0.15/W or $0.20/W, meaning a 10 kW system could have received $1,500 to $2,000 right off the front. Those who qualify for the low to median income households (households making 80% of less of the median area income) can qualify for incentives up to $0.80/W or roughly $8,000.
Upstate and Con Edison territories still have commercial incentives available, though, with values ranging from $0.25/W to $0.45/W.
Loan Programs
New York has several loan programs available to help citizens go solar and get loans at lower interest rates than the open market. NY-Sun offers loans between 2 and 15 years with amounts varying from $1,500 to $25,000. They offer two versions of loans: a Smart Energy Loan, which is a standard loan, or a Residential On-Bill Recovery Loan, where the loan is paid as part of a customer’s utility bill.
PACE financing, or Property Assessed Clean Energy, is also available for commercial solar installations. Under PACE financing, the cost of the solar installations is broken up into a building’s property taxes.
Net Metering
New York is in the middle of a transition to a new form of net metering, called Value of Distributed Energy Resources or VDER. Residential systems, however, can still choose traditional net metering.
Under traditional net metering, excess energy sent to the grid is credited back to homeowners at a 1:1 rate. This means if a home generates an additional $10 in energy during a month, they would receive a $10 credit on their bill they could carry into the next month. Starting in 2022, however, customers who choose traditional net metering are assessed a Customer Benefit Contribution Charge to pay for public programs. The charge is based on a flat rate per kW and varies by utility.
| Utility | 2026 Final Residential CBC Rate $/kW-mo. | 2026 Final Small Commercial CBC Rate $/kW-mo |
| Central Hudson | $1.67 | $1.83 |
| Con Edison | $1.29 | $1.47 |
| LIPA | $1.13 | $1.19 |
| National Grid | $0.97 | $1.38 |
| NYSEG | $1.19 | $1.14 |
| Orange & Rockland | $1.00 | $0.88 |
| RG&E | $1.31 | $0.96 |
Customers who choose to go with traditional net metering receive a higher credit for excess power and are locked into it for 20 years. VDER, on the other hand, has lower rates for the CBC, but the value of excess energy isn’t a flat rate. It’s based on the wholesale energy rate, how much grid demand the project reduces, how much the project reduces future grid upgrade needs, and environmental benefits.
In general, VDER rates are lower than retail rates. Here are the CBC rates for customers who choose VDER:
| Utility | 2026 Final Residential CBC Rate $/kW-mo. | 2026 Final Small Commercial CBC Rate $/kW-mo |
| Central Hudson | $0.84 | $1.28 |
| Con Edison | $0.65 | $1.03 |
| LIPA | N/A | N/A |
| National Grid | $0.49 | $0.97 |
| NYSEG | $0.60 | $0.80 |
| Orange & Rockland | $0.50 | $0.61 |
| RG&E | $0.65 | $0.67 |
So what should a homeowner choose? Based on the rates, it seems like the only time VDER makes sense is if a homeowner plans to send no electricity back to the grid. So if a home installs lots of battery storage and operates in zero export, they could see savings. But for most homeowners, traditional net metering makes more sense.
Where does New York solar go from here?
With strong net metering programs and a state tax credit, the value behind solar remains strong. Despite losing the federal tax credit, we should still see solar advance in New York in both traditional ownership and community solar programs.
The first-ever battery storage project was recently completed in New York City by Brooklyn Solar Works, a massive win for the future of energy storage in the city. With this project leading the way, we may soon see a huge boost in energy storage stemming from NYC.
If you’re in New York and looking to go solar with protection for parts and labor for 30 years, check out our homeowner page to find a Solar Insure Certified Provider near you: https://www.solarinsure.com/find-a-certified-provider
Want to learn more about solar incentives in other states? Check out our solar incentives hub: https://www.solarinsure.com/solar-incentives-guide-to-all-50-states
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