New York has one of the strongest solar incentive stacks in the country: a 25% state tax credit (up to $5,000), the NY-Sun Megawatt Block rebate, full net metering, and a property tax exemption. Here's how to stack them all in 2026.
New York has one of the strongest solar incentive stacks in the country. Between the 25% state tax credit, the NY-Sun Megawatt Block rebate, and full net metering, New York homeowners can offset 30–40% of their system cost through incentives alone. Note: the 30% federal Investment Tax Credit expired December 31, 2025. With electricity rates averaging $0.21/kWh — among the highest in the continental US — solar delivers exceptional payback periods of 5–8 years.
This guide covers every incentive available to New York homeowners in 2026, how to stack them, and what to watch out for.
New York Solar Incentives Overview
| Incentive | Value | Type |
|---|---|---|
| Federal Investment Tax Credit | Expired Dec 31, 2025 — no longer available for 2026 purchases | — |
| NY State Solar Tax Credit | 25% up to $5,000 | State tax credit |
| NY-Sun Megawatt Block Rebate | $0.20–$0.40/W | Upfront rebate |
| Net Metering | Full retail rate credits | Utility credit |
| Property Tax Exemption | 15-year exemption | Local tax exemption |
| Sales Tax Exemption | Full exemption | State sales tax |
Federal Solar Tax Credit — 2026 Update
The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners purchasing systems in 2026 no longer qualify. Solar leases and PPAs are the exception — the installer can claim commercial credits and pass savings through in the monthly rate.
New York's 25% state tax credit (up to $5,000) and NY-Sun rebate remain available and are now the primary federal-level financial drivers for 2026 buyers.
New York State Solar Tax Credit
New York offers a 25% state income tax credit on the cost of a residential solar system, capped at $5,000. On a $20,000 system, the state credit is $5,000 (the cap). Note: the 30% federal ITC expired December 31, 2025 — the NY state credit is now the primary tax-based incentive.
The NY state credit is claimed on Form IT-255. If the credit exceeds your state tax liability in year one, the unused portion carries forward for up to five years.
NY-Sun Megawatt Block Rebate
The NY-Sun Megawatt Block program, administered by NYSERDA, provides upfront rebates for residential solar installations. The rebate rate depends on your utility territory and the program's remaining capacity:
- Con Edison territory: Approximately $0.20/W (check NYSERDA for current availability)
- National Grid / NYSEG / RG&E: Approximately $0.30–$0.40/W
- Long Island (PSEG-LI): Check LIPA's Residential Solar Program for current rates
On a 10 kW system in a National Grid territory at $0.35/W, the rebate is $3,500 off the top before any tax credits. The rebate is applied at installation — your installer handles the paperwork.
Important: The Megawatt Block program has capacity limits. Once a utility territory's block is full, the rebate rate drops or the program closes. Check nyserda.ny.gov for current availability in your territory before signing a contract.
Net Metering in New York
New York has strong net metering rules. Residential solar customers receive full retail rate credits for excess electricity sent to the grid, which offset future bills. Credits roll over month-to-month and can be applied to any month's bill. Annual true-up occurs in April.
ConEdison, National Grid, NYSEG, RG&E, and PSEG Long Island all participate in net metering under PSC rules. Systems up to 25 kW qualify for residential net metering.
Property Tax Exemption
New York State law (RPTL Section 487) provides a 15-year property tax exemption for the added value that solar panels contribute to your home. If your $20,000 solar system increases your home's assessed value by $15,000, you pay zero additional property tax on that increase for 15 years. Some municipalities have opted out — check with your local assessor.
Sales Tax Exemption
New York exempts residential solar energy systems from the state's 4% sales tax. Most counties also exempt solar from their local sales tax. On a $20,000 system, this saves approximately $800–$1,600 depending on your county.
How to Stack New York Solar Incentives
Here is what the math looks like for a typical $20,000 residential solar installation in New York:
| Incentive | Amount |
|---|---|
| Gross system cost | $20,000 |
| Federal ITC (30%) | Expired Dec 31, 2025 — not applicable |
| NY State Tax Credit (25%, capped at $5,000) | −$5,000 |
| NY-Sun Megawatt Block Rebate (est. $0.30/W × 8 kW) | −$2,400 |
| Net out-of-pocket cost | $6,600 |
That is a 67% reduction from the gross cost. With electricity at $0.21/kWh, most NY homeowners see payback in 5–8 years and 25+ years of savings thereafter.
New York Solar FAQ
Is there still a federal solar tax credit in 2026?
No. The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners purchasing in 2026 no longer qualify. New York's 25% state tax credit (up to $5,000) remains available and is now the primary tax-based incentive for NY homeowners.
Is the NY-Sun rebate still available in 2026?
The NY-Sun Megawatt Block program is ongoing but capacity-limited. Availability varies by utility territory. Check nyserda.ny.gov for current block status in your area before signing a solar contract.
Does New York have net metering?
Yes. New York has strong net metering rules requiring utilities to credit residential solar customers at the full retail rate for excess generation. Credits roll over monthly and are trued up annually in April.
What is the property tax exemption for solar in New York?
RPTL Section 487 provides a 15-year property tax exemption for the added assessed value from solar installations. Most municipalities participate, though some have opted out. Check with your local assessor.
How much does solar cost in New York after incentives?
The average residential solar system in New York costs $18,000–$28,000 before incentives. After the state credit and NY-Sun rebate, the net cost is typically $11,000–$17,000, with payback periods of 7–11 years. Note: the 30% federal ITC expired December 31, 2025.
Use our free solar savings calculator to see what these incentives mean for your specific home and energy usage.
