Solar Incentives in New York
New York homeowners considering solar in 2026 have access to several active state-level incentives. The state personal income tax credit covers 25% of qualified solar equipment expenditures, up to a $5,000 cap, with unused amounts carried forward up to five years. Two separate property-tax exemptions shield the increase in assessed value attributable to a solar installation: one under RPTL § 487, which applies for 15 years but allows localities to opt out for systems begun after January 1, 1991, and one under RPTL § 487-a, which applies to one- to four-family homes, carries no time limit, and cannot be waived by local governments. Solar equipment is also exempt from New York's 4% state sales tax and the MCTD rate statewide, though local sales-tax exemptions vary by jurisdiction. Upfront rebates are available through NYSERDA's NY-Sun Megawatt Block program, with per-watt amounts that differ by region and decline as capacity blocks fill. Homeowners whose rooftops are unsuitable may instead subscribe to a community solar project and receive bill credits without any on-site installation. Compensation for grid exports through net metering is governed by Public Service Commission rules under the VDER proceeding; rates vary by utility and should be confirmed directly with the serving utility. NYSERDA also offers low-interest financing of $1,500–$25,000 for eligible installations.
The federal residential Clean Energy Credit under Internal Revenue Code § 25D — commonly described as the 30% solar tax credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act (Pub. L. 119-21). A residential solar system installed in 2026 does not qualify for that credit. Its absence meaningfully lengthens the payback period compared with systems installed in prior years, making the remaining state incentives more significant to the overall economics of a new installation.
No previously available New York state solar program is noted as expired or repealed in the current verified facts. New York's residential electricity rate averaged approximately 28.55 cents per kilowatt-hour as of March 2026, up about 3.10 cents year-on-year. That relatively high rate increases the value of each kilowatt-hour a solar system offsets or exports, which partially compensates for the loss of the federal credit, though actual payback depends on system size, financing terms, applicable net-metering compensation, and which incentives a specific household qualifies for.
Figures here are verified as of June 2026 against official sources; programs, rates, and eligibility rules change with each legislative session and utility rate case, and the New
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in New York
Solar Energy System Equipment Credit
New York offers a personal income tax credit equal to 25% of qualified solar energy system equipment expenditures, capped at $5,000. The system must produce energy for heating, cooling, hot water, or electricity for residential use and be installed at the taxpayer's principal residence in New York State. Purchased systems, leased systems, and power purchase agreements of at least ten years all qualify. The credit is non-refundable but unused amounts carry forward up to five years; claim it on Form IT-255.
| Amount | 25% of qualified expenditures, maximum $5,000; non-refundable with 5-year carryover |
|---|---|
| Who qualifies | NY residents who purchase, lease (written agreement), or buy power under a 10+ year PPA for solar equipment at their principal residence in New York State |
| Administered by | New York State Department of Taxation and Finance |
Source: Tax Law § 606(g-1); Form IT-255 (program page) Official source →
Solar, Wind & Farm Waste Energy Systems Property Tax Exemption (RPTL § 487)
Real property containing a solar energy system approved by NYSERDA is exempt from taxation for 15 years to the extent of any increase in assessed value attributable to the system. Counties, cities, towns, villages, and most school districts may opt out by local law or resolution for systems whose construction began after January 1, 1991 and before January 1, 2030; jurisdictions that opt out may instead require a PILOT agreement of up to 15 years. Property owners file Form RP-487 with the local assessor.
| Amount | 100% exemption of the increase in assessed value due to the system, for 15 years; property remains liable for special ad valorem levies and special assessments |
|---|---|
| Who qualifies | Solar (and wind, farm waste, and certain other) energy systems meeting NYSERDA eligibility definitions; subject to local opt-out; construction must begin before January 1, 2030 for opt-out-eligible systems |
| Administered by | New York State Department of Taxation and Finance, Office of Real Property Tax Services (administered by local assessors) |
Source: Real Property Tax Law § 487; Form RP-487 Official source →
Energy Conservation Improvements Property Tax Exemption (RPTL § 487-a)
Energy conservation measures added to one- to four-family homes, explicitly including solar and wind systems, are exempt from real property taxation and special ad valorem levies to the extent of any increase in assessed value resulting from the installation. Unlike RPTL 487, there is no local option to disallow this exemption and no duration limit. Improvements qualify if they are financeable under a home conservation plan or qualify for any conservation-related state or federal tax credit or deduction.
| Amount | 100% exemption of the increase in assessed value resulting from eligible improvements; no time limit |
|---|---|
| Who qualifies | Privately owned one-, two-, three-, or four-family homes; improvements qualifying under Public Service Law Article VII-A home conservation plans or for a conservation-related state/federal tax credit or deduction |
| Administered by | New York State Office of Real Property Tax Services (administered by local assessors) |
Source: Real Property Tax Law § 487-a Official source →
Residential Solar Energy Systems Equipment Sales Tax Exemption
Since 2005, retail sales and installations of residential solar energy systems equipment are exempt from New York State's 4% sales and use tax and from the 3/8% Metropolitan Commuter Transportation District (MCTD) rate. Local sales taxes apply unless the county or city has enacted the optional local exemption; Publication 718-S lists which jurisdictions exempt residential solar (New York City and many counties do) and which still tax it.
| Amount | Exempt from the 4% state sales/use tax and 3/8% MCTD rate statewide; local rates (typically 1.5%-4.5%) exempt only where the locality has enacted the exemption |
|---|---|
| Who qualifies | Retail sales and installations of residential solar energy systems equipment |
| Administered by | New York State Department of Taxation and Finance |
Source: Tax Law § 1115(ee); TSB-M-05(11)S; Publication 718-S Official source →
Net Metering / Value of Distributed Energy Resources (VDER)
New York compensates customer-sited solar under rules set by the Public Service Commission in the Value of Distributed Energy Resources proceeding (Case 15-E-0751). Residential rooftop solar customers are generally credited under net metering, reconciling grid purchases against exported energy each billing cycle, while the VDER Value Stack (components for energy, generation capacity, demand reduction or locational relief, and environmental value) is the primary mechanism for community distributed generation and an alternative for other projects. Exact credit values and charges, including the Customer Benefit Contribution charge for newer mass-market customers, vary by utility tariff.
| Amount | Varies by utility and compensation track; net-metered residential exports are credited at retail-equivalent kWh rates, Value Stack projects receive component-based monetary credits for a 25-year term; see PSC Case 15-E-0751 and individual utility tariffs |
|---|---|
| Who qualifies | Customers of investor-owned utilities with eligible distributed generation (solar PV, storage, wind, hydro, CHP, fuel cells, anaerobic digesters); PSEG Long Island operates parallel tariffs |
| Administered by | New York State Public Service Commission / Department of Public Service |
Source: PSC Case 15-E-0751 (Value of Distributed Energy Resources); Public Service Law § 66-j Official source →
NY-Sun Residential Incentive (Megawatt Block)
NY-Sun, administered by NYSERDA, provides upfront per-watt incentives for residential solar installations, paid through participating contractors and deducted directly from the project price; the incentive amount must be disclosed in the customer contract. Incentives are allocated by region (Con Edison, Upstate, Long Island) in declining megawatt blocks, so amounts depend on project size, location, and remaining block capacity. Households earning less than 80% of their area median income can qualify for additional Affordable Solar incentives via an income eligibility application.
| Amount | Varies by region and current MW block (see NYSERDA block dashboards); additional Affordable Solar adder for households under 80% of area median income |
|---|---|
| Who qualifies | Homeowners installing on-site solar through a NY-Sun participating contractor; Affordable Solar adder requires income below 80% of area median income |
| Administered by | New York State Energy Research and Development Authority (NYSERDA) |
Source: NY-Sun program page (PON 2112) Official source →
Community Solar (Community Distributed Generation)
New York's community solar program lets homeowners, renters, businesses, and multifamily buildings subscribe to off-site solar projects and receive credits on their monthly electric bills for their share of the electricity produced, with no on-site installation required. Subscribers are compensated through the VDER Value Stack crediting mechanism under PSC rules. New York leads the U.S. in community solar capacity with more than 1,300 projects built as of March 2025, and income-eligible customers can get bill assistance through the Statewide Solar for All program.
| Amount | Bill credits based on the subscriber's share of project output; savings vary by project and subscription terms |
|---|---|
| Who qualifies | Any electric customer in a participating utility territory, including renters; Statewide Solar for All targets income-eligible households |
| Administered by | NYSERDA (program promotion) / NYS Public Service Commission (CDG crediting rules) |
Source: NYSERDA Community Solar program page; PSC Case 15-E-0751 (CDG) Official source →
NYSERDA Residential Financing (On-Bill Recovery & Smart Energy Loans)
NYSERDA offers low-interest loans of $1,500 to $25,000 for purchase and installation of solar PV, heat pumps, and energy efficiency improvements at one- to four-family homes, with 5-, 10-, or 15-year terms. The On-Bill Recovery Loan is repaid through the utility bill (monthly energy savings must exceed the loan payment, and the balance can transfer to a new owner at sale); the Smart Energy Loan is a traditional unsecured loan repaid by check or ACH. A no-cost home energy assessment is required before accessing a loan, and loans over $13,000 must have a payback period under 15 years per the Green Jobs-Green New York legislation.
| Amount | $1,500-$25,000; 5/10/15-year terms; interest rates vary (published by NYSERDA) with reduced rates for lower-income applicants |
|---|---|
| Who qualifies | Owners of existing 1-4 family residential properties in New York State; energy assessment required; credit criteria apply; new construction and gut rehabs excluded |
| Administered by | New York State Energy Research and Development Authority (NYSERDA) |
Source: Green Jobs-Green New York Act of 2009 (program page) Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.