New York Solar Incentive Programs

This is New York's flagship residential solar incentive. You claim 25% of the total qualified cost of your solar energy system equipment and installation, up to a maximum of $5,000. The credit is applied directly against your NY state income tax liability.

The credit is non-refundable, meaning it can reduce your tax bill to zero but you won't receive a refund check for any excess. Any unused credit amount carries forward for up to five additional tax years before expiring. Multiple taxpayers sharing a residence prorate the credit based on each person's share of the cost (except married couples filing jointly).

For a typical 8 kW system at $22,000 total installed cost, the credit equals $5,000 (the maximum). At $16,000, the credit equals $4,000. File using NY Form IT-255 with your state return.

NY-Sun's Megawatt Block program pays a per-watt incentive directly to your solar installer, who passes the savings to you as a lower system price. Incentive rates are set in "blocks", a fixed amount of megawatts at each rate, and decrease as each block fills up. When a block closes, the next one opens at a lower rate.

The program is divided into three regions. Upstate (National Grid, NYSEG, and RG&E service territories; Upstate Residential Block 14 does not cover Central Hudson) has its own block structure. ConEd territory (New York City and Westchester) has a separate block structure; Block 10 for residential closed May 29, 2025 and future blocks will be announced. Long Island (PSEG Long Island / LIPA) has its own dashboard.

Because block rates change frequently, always ask your installer for the current NYSERDA-confirmed incentive for your utility territory. A reputable NY-Sun participating contractor will show you the exact per-watt amount on your quote.

When your solar panels produce more electricity than you use in a given month, the excess is sent to the grid and credited to your bill. For most residential customers, this credit is at the retail electricity rate, which is significant in New York where rates often exceed $0.20/kWh.

ConEd customers (New York City and Westchester County) installing today are on Phase One net metering: excess credits roll over month to month and year to year with no annual cash-out, and systems with permission to operate on or after January 1, 2022 pay a monthly Customer Benefit Contribution charge per kW DC ($1.29 per kW DC per month for Con Edison in 2026; rates change yearly).

VDER (Value of Distributed Energy Resources), sometimes called the "Value Stack," is used by some upstate utilities and is available as an alternative. VDER pays for generation using five value components: Energy (hourly wholesale price), Capacity (peak capacity value), Environmental (renewable attribute value), Demand Reduction Value, and Locational System Relief Value. VDER rates vary by utility and hour; they are not a fixed 1:1 retail credit. Ask your utility or installer which tariff applies to your address.

Use the NYSERDA Solar Value Stack Calculator (available on nyserda.ny.gov) to estimate VDER compensation for your specific location and utility.

New York Real Property Tax Law §487 exempts the increase in your home's assessed value attributable to your solar installation from property taxes for 15 years. This means adding a solar system won't increase your annual property tax bill, even though it increases your home's market value.

To claim the exemption, file Form RP-487 with your county assessor before the taxable status date for your jurisdiction (typically March 1, but varies). One RP-487 filed with your city or town assessor covers county, city/town, and school district taxes; file a separate application with the village assessor for village taxes. Each jurisdiction may have opted out independently.

Important: The exemption is a local option, not automatic. Municipalities (counties, cities, towns, villages, school districts) may pass a local law to opt out and disallow the exemption within their jurisdiction. A significant number of communities across New York have done so. Always verify with your local assessor's office whether the exemption is available at your address before relying on it in your financial calculations.

New York City and certain other large cities that administer their own real property tax systems may have separate rules not covered by RPTL §487 as applied statewide; contact your city's tax office directly if you are in a large city.

New York Tax Law §1115(ee) exempts solar energy systems equipment from the state's 4% sales tax and the 3/8% Metropolitan Commuter Transportation District (MCTD) surcharge. On a $20,000 system, that's a savings of $875 in state and MCTD tax alone.

Local county and city sales taxes (which typically range from 3% to 4.875%) are not automatically exempt. Some counties have adopted their own local exemptions and others have not. Your installer is responsible for collecting the correct taxes; confirm whether your county's local rate applies at your address.

Contractors purchasing materials to install on your property use Form ST-120.1. If you purchase equipment directly, use Form ST-121. See NY Tax Bulletin ST-776 from the Department of Taxation and Finance for the full list of qualifying equipment.

The Section 25D residential clean energy credit was eliminated by the One Big Beautiful Bill (P.L. 119-21, signed July 4, 2025) for any residential solar energy system whose installation was completed after December 31, 2025. If your system's installation was completed on or before December 31, 2025, you can still claim the 30% credit on IRS Form 5695 with your 2025 federal tax return.

Systems whose installation is completed in 2026 and beyond do not qualify for any federal residential solar credit. New York's own incentives, the 25% state credit, NY-Sun rebate, property tax exemption, and sales tax exemption, remain fully active and are not affected by this federal change.