New York solar incentives, tax credits and rebates

Solar incentives in New York

If you're thinking about going solar in New York, you should know about the federal solar investment tax credit (ITC). The tax credit lets you deduct 30% off your solar system’s entire cost from your federal taxes. The total amount you can deduct includes labor, equipment and permits.

Let's say you shell out $13,000 for your new solar system. When tax time rolls around, you'll get a $3,900 credit. The 30% credit is only good for systems installed through the end of 2032, however. After that, it drops to 26% in 2033 and then 22% in 2034.

Don't expect this to be a straight-up rebate or refund, though. When you file your federal taxes for the year your system is up and running, you must claim it and fill out Form 5695.

More solar incentives in New York

Statewide residential solar incentives in New York

Folks living in New York have more residential solar incentives than many other states. Incentives include multiple tax breaks, loan options and rebates.

Tax breaks

New York has a wide range of tax breaks for residents going solar. The state income tax credit is worth 25% of what you spend on the gear and putting it in place. There's a cap on how much you can get back, though. If you got your system rolling before Sept. 1, 2006, the max you can claim is $3,750. If you got it up and running on or after that date, you can claim up to $5,000.

Another tax break gives residents a 100% exemption from state sales tax for solar power systems. You can also write off 100% of the value of solar home improvements that increase the value of the home, like panels, solar water heaters, etc.

Some areas of New York also offer a property tax exemption for the value solar panels add to homes and a 100% sales tax exemption. If you live in the city of New York, you may qualify for additional property and sales tax incentives.

» MUST-KNOW: The tax benefits of owning a home: must-know deductions and secrets

Rebates

The NY-Sun PV Incentive Program pays a portion of the cost of your solar system. The amount is paid directly to the contractor. How much money you get off your system varies depending on which local electric company you use. The town of Riverhead in Long Island also offers discounts on permits for solar improvements to homes.

Loan programs

Chances are you can find a solar loan in the state of New York even if you have less-than-stellar credit. New York State participates in the Property-Assessed Clean Energy (PACE) financing program. Through the PACE program, homeowners can get a fixed loan for their solar system and pay it back through a fee added to their property taxes.

The New York State Energy Research and Development Authority (NYSERDA) also has a loan program. New York residents who can't get traditional loans can qualify for this loan with lower interest rates.

There are two different loan types available through NYSERDA: Companion Loans and Bridge Loans. The Companion Loan lets you borrow extra if your project costs more than the cap on other loans. The Bridge Loan is a short-term financing loan that helps you borrow some of the money you'll get back later through tax breaks.

The NY-Sun Loan Program offers loans that range from $1,500 to $25,000. These loans can be paid back over five, 10 or 15 years.

What to know about net metering in New York

If the excess energy your system makes isn’t stored in a solar battery, it's sent to the power grid.

Net metering ensures that you get a credit on your electricity bill to pay for the energy you send to the grid. In New York, residential solar systems up to 25 kilowatts (kW) qualify for net metering. The credit is applied to the next month’s bill.

For example, Joseph in Amagansett, who went solar last year, said, “My electric utility bill is now just fees and taxes, no grid consumption.”

“I'm exporting to the grid. I'm happy about that,” another solar customer, Frank in Bloomingburg, told us. “What a lot of people might be concerned about, besides environmental, would be there's a significant cost savings. There are significant tax rebates.”

» GREENEST STATES: New York ranks No. 12

Solar resources in New York

Below are some additional resources that can guide you through transitioning to solar in New York.

• New York solar panels: Local pricing and installation data
• New York Green Bank
• Solar for Your Home - NYSERDA
• New York Solar Facts
• Is Solar Worth It in New York? (2023 Homeowner's Guide)

» GUIDE: Solar panel installation guide

Find solar companies in New York

Compare popular solar companies available in New York below. Read our guide to finding the best solar companies for more.

Bottom line: How much are solar panels in New York?

In New York, the average cost for a solar system, after tax credits, comes to $13,423, which is lower than the national average of $16,715. The state offers excellent incentives like tax credits, rebates and loan programs for going solar. With a federal tax credit average of $5,752 and an estimated 25-year savings of $24,387, New York makes a compelling case for switching to solar.

“The average consumer who's going to be a homeowner should look upon this the same way that they look on buying a house, that is you're looking for the long haul,” according to Paul in Queens.

“You're talking about spending a minimum of $15,000 for each floor on the costs after the rebates,” Paul said. “In my two investment properties on the block here two years ago, I've gone through two complete cycles and they work marvelously.”

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in New York and the average solar costs in other states.

Solar costs: New York vs. nearby states