New York Solar Incentives: Tax Credits & Rebates Guide (2022)

By Jacob L.

New York State might not be the first place that comes to mind when you think of solar energy, but it is soon to be one of the hotspots for solar electricity production in the whole of the United States. Indeed, thanks to the Empire State’s ambitious new Renewables Portfolio standard, and a variety of additional initiatives aimed to lessen the cost of installing photovoltaic (PV) energy, New Yorkers now have access to cheap and readily available solar energy. By having a solar power system in your home, you can ensure minimal initial costs and steady savings for decades to come.

Why Go Solar in New York?

With 224 sunny days per year, New York is far from the sunniest state in the Union. However, the national average is only 205 days of sun per year, which places New York in the top half of the states when it comes to suitable climates for solar energy production.

Even with less sun than states like California and Arizona, New York is still a great place for solar panels thanks to the development of new solar technology that has greatly increased the efficiency and effectiveness of photovoltaic cells.

New York’s Renewable Portfolio Standard (RPS), which was established in 2004, required utilities to supply 25 percent of their electricity sales from renewable energy by 2013. In 2016, the new RPS came into effect, mandating 50 percent of electricity to be sourced by renewables by 2030. As a result of these mandates, New York has dramatically reduced its carbon emissions and created a far more conducive environment for solar energy production.

For example, the growth of solar energy production has created the existing availability of local solar providers throughout the state. These providers offer customers the opportunity to entertain a variety of competing quotes while ensuring that they receive the best quality service and equipment.

Finally, solar panels can dramatically increase your home’s value. According to Zillow, the average home experiences a 4.1% increase in its value after the addition of a solar power system. Homes in New York City (NYC) actually increase by 5.1%, making it even more worthwhile to install solar panels. Overall, in the state of New York, the average home value increase from solar panels will be close to $23,989.

New York Solar Cost

The average total cost of solar installations in New York ranges from $13,345 to $18,055. On a cost-per-watt basis, solar panel installation in New York ranges from $2.67 to $3.41. These costs have come down significantly in recent years. Obviously, if you purchase a larger system (more watts), your cost will increase in addition to your energy production. With energy bills increasing amid high oil and gas prices, the relative cost of solar is bound to decline further.

Solar system on house rooftop

Interested in solar energy but not sure where to start?

Get free quotes from House Method approved solar installers

Get a Free Quote

How Much Can You Save on Solar in New York?

Despite the upfront cost of purchasing and installing your solar system, you can save lots of money per year, thanks to the electricity your system produces. The mechanism behind the savings works like this: when solar panels produce electricity for your home, they reduce the amount of energy that you pull from the grid, thus lowering your utility bills.

People living in New York save thousands of dollars per year on electricity bills after paying off the cost of their initial purchase. With a payback period of 3.2 to 3.9 years, you find yourself saving thousands of dollars per year in almost half a decade. Over the 20 to 25-year lifetime of your photovoltaic (PV) equipment, you will experience net savings between $61,533 and $75,207. With these kinds of savings, why wouldn’t you get in on the solar energy market?

The Best Solar Incentives, Tax Credits, & Rebates in New York

There are several public and private incentives in New York that help you save on your purchase of solar panels in New York:

Incentive Summary End Date
Federal Solar Tax Credit (ITC) New York residents can take advantage of the Federal Solar Tax Credit and get a discount of 30% applied to their tax returns. December 31st, 2032
New York State Solar Tax Credit This tax credit is equal to 25 percent of total installation costs, up to $5,000, and can be used alongside the federal solar tax credit. In total, the two incentives can reduce the cost of purchasing a solar energy system by more than half after the first year. None
Home Solar Project State Sales Tax Exemption New York residents can access a 4% home solar system sales tax exemption. None
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers are required to offer this option to homeowners. None
NY-Sun Megawatt (MW) Block Program The NY-Sun initiative provides up to $1,000 for every kilowatt (kW) of solar power purchased and installed. None
Solar Electric Generating System Tax Abatement (SEGS) New York has created a property tax exemption on the added value to your home that comes with installing a solar energy system. None
USDA REAP GRANT REAP assists agricultural producers and rural small businesses reduce their energy costs and consumption by providing loan financing and grant funding to purchase and install renewable energy systems. Eligibility for the REAP program depends on you being an agricultural producer, with at least 50 percent of your gross income coming from agricultural operations and small businesses in eligible rural areas. None
New York State Commercial Financing Options Commercial business owners in New York can access a range of financing options when they purchase a solar energy system. None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax Credit (ITC) is a 30% federal tax credit available for home solar systems purchased and installed by the end of 2032, thanks to the recent passage of the Inflation Reduction Act. This is a significant chunk of money taken off their personal income taxes. Plus, the ITC has done a great job expanding the country’s solar industry. It has helped create hundreds of thousands of jobs while bringing billions of dollars into the economy since being enacted in 2006.

New York State Solar Tax Credit

This tax credit is equal to 25 percent of total installation costs, up to $5,000, and can be used alongside the federal solar tax credit. In total, the two incentives can reduce the cost of purchasing a solar energy system by more than half after the first year.

New York Net Metering

Electricity companies in New York have all adopted net energy metering, which is a policy that ensures your solar panels will be connected to the public-utility power grid, and that surplus power created by your panels will be transferred to the grid. You can offset the cost of power drawn from the electricity grid as a result of net metering.

The minimum amount of compensation that you’ll receive is the avoided-cost rate, which is below the retail rate. While the policy specifics of net metering programs will vary among providers, it remains hugely beneficial for owners of solar energy systems.

Home Solar Project State Sales Tax Exemption

New York residents can access a 4% home solar system sales tax exemption.

NY-Sun Megawatt (MW) Block Program

Eligible New York homeowners can get up to $1,000 for every kilowatt (kW) of solar power they purchase and install on their properties. The incentive is divided into different regions, and the rate of the incentive will depend on the region in which you are located.

Solar Electric Generating System Tax Abatement (SEGS)

New York will exempt property taxes on the added value to your home that comes with installing a solar energy system.

Commercial New York Solar Incentives

Solar Incentives for Nonprofits and Businesses in New York

There are many financing options available to business owners in New York State. For example, you can access the Small Business/Not-For-Profit On-Bill Recovery Loan, the Small Commercial Participation Loan, and the Commercial/Industrial-Energy Improvement Corporation (EIC) loan. For more information, check out this website.

USDA REAP Grant

The United States Department of Agriculture (USDA) has launched a program designed to increase investments in clean energy called the Rural Energy for America Program (REAP). REAP helps agricultural producers and rural small businesses lower their energy costs and consumption by financing loans and grant funding to purchase and install renewable energy systems.

You are eligible to participate in the REAP program if you are an agricultural producer with at least 50 percent of your gross income coming from agricultural operations or a small business in eligible rural areas.

Key Takeaways: The Best New York Solar Incentives

The Empire State has some of the best incentives in the world to help you get started on your solar energy project. With a relatively suitable amount of sun and cheap and easy access to solar panels and equipment, why wouldn’t you invest right now? Plus, with variable energy prices around the world and climbing utility bills at home, now is a great time to protect the price of your energy consumption for years to come. If you are interested in purchasing, there are many great companies that will help get you set up.

New York Solar FAQ

Is solar worth it in New York?

New York is an excellent place to buy solar energy systems, and we highly recommend doing so before energy prices go even higher! Solar can save you tons of money on your utility bills and help reduce your production of emissions and your carbon footprint. Plus, a variety of federal, state, and local financial incentives are available in New York to make the purchase of solar panels accessible to anyone!

How much will my electricity bill go down with solar in New York?

People living in New York save thousands of dollars per year on electricity bills after paying off the cost of their initial purchase. With a payback period of 3.2 to 3.9 years, you find yourself saving thousands of dollars per year in almost half a decade. Over the 20 to 25-year lifetime of your photovoltaic (PV) equipment, you will experience net savings between $61,533 and $75,207. With these kinds of savings, why wouldn’t you get in on the solar energy market?

How much does it cost for solar panels in New York?

The average total cost of solar installations in New York ranges from $13,345 to $18,055. On a cost-per-watt basis, solar panel installation in New York ranges from $2.67 to $3.41. These costs have come down significantly in recent years. Obviously, if you purchase a larger system (more watts), your cost will increase in addition to your energy production. With energy bills increasing amid high oil and gas prices, the relative cost of solar is bound to decline further.

Can you get solar panels for free in New York?

While you probably won’t find ‘free’ solar panels in New York, residents of New York are lucky to have the support of numerous federal, state, and local financial incentives that will help to minimize the costs associated with purchasing a new solar energy system.

What solar rebates are available in New York?

There are many federal, state, and local financial incentives for purchasers of solar energy systems in New York. These include the federal government’s Solar Investment Tax Credit (ITC), the New York State Tax Credit, and many local and private incentives.

How many homes in New York have solar panels?

There is enough solar installed in New York to power over 593,699 homes, and solar accounts for 3.28% of the state’s electricity production.

Do solar panels increase property taxes in New York?

No, your taxes won’t increase. New York will exempt property taxes on the added value to your home that comes with installing a solar energy system. This is another excellent reason to invest in solar!

How much can you write off for solar panels on taxes in New York?

New York taxpayers can choose to write off lots of the system costs associated with the purchase of new solar panels. For more information about incentive programs, check out the New York government’s website.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

  • Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
  • Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
  • Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
  • Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
  • Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
  • Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
  • Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

More on Solar from House Method

Solar

Minnesota Solar Incentives: Tax Credits & Rebates Guide (2022)

Solar incentives can help you afford a solar power system sooner. This guide reviews all the solar incentives and rebates for Minnesotans.

Solar

Rhode Island Solar Incentives: Tax Credits & Rebates Guide (2022)

Federal and state tax incentives are great resources for going solar. Our guide outlines how to utilize these incentives for Rhode Island.

Solar

North Carolina Solar Incentives: Tax Credits & Rebates Guide (2022)

Solar rebates can help you afford a solar system sooner. This guide reviews all the solar incentives available in North Carolina!

Blue photovoltaic solar panels mounted on building roof for producing clean ecological electricity at sunset. Production of renewable energy concept.
Solar

Arizona Solar Incentives: Tax Credits & Rebates Guide (2022)

Solar rebates can help you save thousands on a new solar system. This guide reviews all the solar incentives for Arizona residents to help them go solar sooner!

Solar

Delaware Solar Incentives: Tax Credits & Rebates Guide (2022)

Delaware is starting to go solar. Our guide outlines the best federal and state solar incentives for Delaware to help you save money.

Solar panels on the roof of the modern house,Harvesting renewable energy with solar cell panels,Exterior design,3d rendering
Solar

Georgia Solar Incentives: Tax Credits & Rebates Guide (2022)

Solar incentives can help you afford a solar power system sooner. This guide reviews all the solar incentives and rebates for Georgians!

Solar

Alabama Solar Incentives: Tax Credits & Rebates Guide (2022)

Alabama is moving towards solar power. This guide outlines the best federal and state tax incentives for Alabama to help you save while going green.

Solar

How Much Do Solar Panels Save? (Cost & Energy Savings)

Do you want to save on your energy bills and decrease your carbon footprint? Click here to learn how much you can save by installing solar panels on your roof.

Solar system on house rooftop
Home Warranty

Are Solar Panels for Your Home Worth It?

With the advancements in solar technology, solar panels have become much more cost-effective for your home.