New York solar rebates and incentives: 2024 guide

The average New York solar shopper will save $4,586 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Emily Walker

    Solar panel systems in New York are expensive, but incentives from the state and federal government can help you reduce the upfront cost. Between the federal tax credit and other state-specific incentives, you can save thousands on solar panels, making them well worth the investment. Here's how you can lower the cost of solar if you live in New York.

    See how much solar costs in New York

    As a New York homeowner, you have access to some great incentives that can substantially improve your return on investing in solar panels. The three below are some of the most impactful ways to bring down your solar costs.

    Incentive
    Average savings in New York
    Description

    Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

    $4,586

    Lowers your solar panel system's cost by 30%

    The Megawatt Block Incentive Structure

    $2,000

    Lowers your solar panel system's cost by $200/kW for most households (as of March 2024)

    New York Solar Energy System Equipment Credit

    $5,000

    Lowers your solar panel system's cost by 25%, up to $5,000

    Residential Clean Energy Credit

    The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including the equipment, labor, permitting, and sales tax. 

    The average cost for a 5 kW solar panel system in New York is around $15,286. Once you factor in the 30% credit, the cost comes down to $10,700.

    When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

    You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

    Megawatt Block Incentive

    New York’s Megawatt Block Incentive is part of the NY-Sun Initiative aimed at making solar energy more accessible. It provides an upfront dollars-per-watt ($/W) rebate for both commercial and residential solar panel systems. 

    Your rebate amount depends on the size of your system, your region, and your income. Low-to-moderate income (LMI) households qualify for the Affordable Solar Residential Incentive, which provides a higher rebate amount. The incentive is declining, which means its value declines over time. As of March 2024, here's what you can expect for residential systems up to 25 kW in size:

    Region
    Incentive amount

    Upstate standard customer

    $200/kW

    Con Edison standard customer

    $200/kW

    Long Island standard customer

    $200/kW

    Upstate LMI customer

    $800/kW

    Con Edison LMI customer

    $800/kW

    Long Island LMI customer

    $400/kW

    New York Solar Energy System Equipment Credit

    The New York solar tax credit can reduce your state tax bill by 25%, up to $5,000. Unlike the ITC, you don't need to purchase your solar panel system to receive this tax credit. If you enter into a written solar lease or power purchase agreement (PPA) that lasts at least 10 years, you'll still qualify.  

    If you don't have enough tax liability to take advantage of the full tax credit, you can roll over any remaining credit for up to five years.

    In addition to the great rebates and incentives above, New York also offers tax exemptions for solar panel systems. The solar sales tax exemption ensures that you won't have to pay a sales tax on your system, while the solar property tax exemption means you don't need to pay a higher property tax for adding solar panels to your house.

    Tax exemption
    Average savings in New York
    Description

    New York solar sales tax exemption

    4% of system cost

    You don't need to pay any sales tax on new solar panel systems in New York, saving at least 4% of your system costs

    New York solar property tax exemption

    1.23% of system value, annually on average

    If you use solar energy as a source of power, for 15 years you won't need to pay a tax on the value your solar panels add to your property

    If your solar panel system is less than or equal to 25 kW in size and it's connected to the grid, you can benefit from net metering, one of the best solar panel incentives available in New York. With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

    New York is in the process of transitioning from net metering to a new Value of Distributed Energy Resource (VDER) tariffs, though the timeline isn't clear yet and you can still sign up for net metering as of 2024. 

    The VDER tariff is based on five key factors: the locational-based marginal pricing (LBMP), capacity (ICAP), environmental value (E), demand reduction value (DRV), and locational adders (LSRV). If this sounds confusing, that's because it is. The easiest way to see your expected VDER tariff is by using New York State Energy Research and Development (NYSERDA)'s free Value Stack Tariff calculator.

    Due to its complexity, the VDER tariff rate is a lot less predictable than net metering. In most cases, you'll save a lot more over 20 years by signing up for net metering while it lasts instead of the VDER tariff. As of March 2017, any solar panel system interconnected in New York can lock in net metering for 20 years. 

    Starting in 2022, you now have to pay a capacity-based Customer Benefits Constribution (CBC) charge each month with a solar panel system. The charge is higher for net metering customers than for VDER tariff customers, but it's still usually best to sign up for net metering. Here's how much the CBC will cost you for a residential solar panel system in 2024:

    Utility
    Monthly net metering CBC rate
    Monthly VDER CBC rate

    $1.37

    $0.69

    $1.41

    $0.70

    $0.85

    N/A*

    $1.45

    $0.73

    $0.91

    $0.46

    $1.39

    $0.70

    $1.16

    $0.58

    *The VDER tariff is not available to LIPA customers.

    New York doesn't offer any state-specific battery incentives for residential systems. However, all batteries above 3 kWh are eligible for the 30% federal tax credit. In New York, batteries can help protect you from blackouts and provide more energy independence.

    Learn more about battery incentives and rebates See the complete list of solar companies in New York

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