🇺🇸 New York State Published 2026-05-07 · 10 min read

New York Solar Incentives 2025: NY-Sun, 25% State Tax Credit & Tax Exemptions

New York offers one of the most generous solar incentive stacks in the US: a 25% state tax credit (up to $5,000), the NY-Sun rebate programme, plus full sales and property tax exemptions — on top of the federal 30% ITC. Here's how to claim every dollar.

MUK

Written by

Muhammad Umar Khan

Muhammad founded KilowattKit after spending hours trying to decode confusing electricity bills — and realising there were no simple, jargon-free tools to help ordinary homeowners understand their energy costs. He researches electricity rates, EV charging, solar payback, and heat pump economics across the US, UK, Canada, and Australia.

New York Solar Incentives at a Glance

30%

Federal ITC

25%

NY state tax credit (max $5k)

NY-Sun

Upfront Megawatt Block rebate

Sales &
Property

Tax exemptions

How the Incentives Stack: Full Worked Example

8kW solar system in Westchester (Con Edison territory)

Gross system cost (before incentives) $25,000

Sales tax exemption (NY state 4% + county) −$1,125 saved at purchase

NY-Sun Megawatt Block rebate (~$0.20/W × 8,000W) −$1,600 (applied by installer)

Adjusted cost for tax credit calculation $23,400

Federal ITC — 30% of $23,400 −$7,020 (claimed on tax return)

NY state tax credit — 25% (max $5,000) −$5,000 (claimed on state return)

Effective net cost ~$11,380 (55% off)

Plus property tax exemption saving ~$300–$500/year for 15 years. NY-Sun rate varies by step and territory — confirm with your NYSERDA-approved installer.

NY-Sun Megawatt Block: How It Works

NY-Sun divides New York into three utility territories: Con Edison (NYC, Westchester), Long Island (PSEG-LI), and Upstate (National Grid, RG&E, NYSEG, O&R, Central Hudson). Each territory has its own block structure with a set amount of solar capacity allocated at each rebate rate.

Territory	Utilities covered	Typical residential rate	On 8kW system
Con Edison	NYC + Westchester	~$0.20–$0.40/W	$1,600–$3,200
Long Island	PSEG-LI	~$0.20–$0.40/W	$1,600–$3,200
Upstate	National Grid, RG&E, NYSEG, others	~$0.10–$0.20/W	$800–$1,600

Rates step down as each block fills. Check current availability at nyserda.ny.gov or ask your approved installer for the current step and rate. Additional incentives available for low-income households (Affordable Solar) and community solar.

New York's Tax Incentives for Solar

25%

NY State Income Tax Credit — up to $5,000

Claimed on Form IT-255 with your NY State income tax return. Reduces your state tax bill dollar-for-dollar. 5-year carryforward if credit exceeds liability. Applies to installation cost net of NY-Sun rebate. Can be combined with federal 30% ITC — both claimed on the same system in the same tax year.

Sales Tax Exemption — state + most counties

NY Tax Law Section 1115(kk) exempts residential solar systems from the 4% NY state sales tax. Most counties also apply their local exemption. On a $25,000 system in a county with 4.5% combined rate, this saves ~$1,125. Applied automatically by the installer at point of purchase — no application required.

15yr

Property Tax Exemption — 15 years

Under RPTL Section 487, the added assessed value of your solar system is excluded from property taxes for 15 years. Most New York municipalities participate. A $25,000 system adding $20,000 in home value, taxed at 1.5%, saves $300/year × 15 years = $4,500 total in avoided property taxes. Confirm your municipality's participation with your local assessor.

Net Metering in New York

New York maintains one of the stronger net metering policies in the US. Unlike California (which switched to NEM 3.0 in 2023), New York's Value of Distributed Energy Resources (VDER) tariff — commonly called "Value Stack" — provides export credits that reflect the time-varying value of solar generation to the grid.

New York net metering key points:

Con Edison and Upstate utilities: Legacy net metering (retail-rate credits) still available for new customers in most territories through 2025–2026
VDER (Value Stack): New York's newer tariff gives credits based on time-of-day, location value, and environmental value — can exceed or fall below retail rate depending on when you export
Excess credits: Roll over monthly; annual reconciliation at a lower rate
Long Island (PSEG-LI): Has its own net metering structure — verify current terms with PSEG-LI directly

Stack all incentives with our solar payback calculator

Enter your system cost and electricity rate to see your payback period and 25-year savings — accounting for all incentives combined.

Solar payback calculator →

Frequently Asked Questions

What is NY-Sun and how do I access it? ▼

NY-Sun is New York State's solar incentive programme administered by NYSERDA (New York State Energy Research and Development Authority). It provides upfront rebates through a "Megawatt Block" structure — each utility territory has a set amount of capacity (measured in megawatts) at each incentive level. As blocks fill up, the per-watt incentive steps down. You access NY-Sun through any NYSERDA-approved solar installer — they handle the application and apply the rebate to your quote. Find approved installers at nyserda.ny.gov/ny-sun.

How does the 25% New York state tax credit work? ▼

New York offers a 25% state income tax credit on solar installation costs, capped at $5,000. This credit is claimed on Form IT-255 with your New York State income tax return. Like the federal ITC, it's a dollar-for-dollar reduction in your state tax bill — not a deduction. If your credit exceeds your state tax liability in a given year, you can carry the unused portion forward for up to 5 years. The credit applies to the same costs as the federal ITC — panels, inverters, installation, and batteries (if solar-charged). The NY state credit and federal 30% ITC can be claimed simultaneously on the same system.

Do the federal ITC and NY state credit stack together? ▼

Yes — you can claim both the 30% federal ITC and the 25% NY state tax credit on the same solar installation. However, there's a sequencing consideration: you must first subtract any NY-Sun rebate from the total cost before calculating both credits. For example, on a $25,000 system with a $2,000 NY-Sun rebate, your eligible cost for both credits is $23,000. Federal ITC (30%) = $6,900; NY state credit (25%, max $5,000) = $5,000. Total incentive value: ~$13,900 off a $25,000 system before considering the Megawatt Block rebate.

What is New York's property tax exemption for solar? ▼

New York State's Real Property Tax Law Section 487 exempts solar energy systems from local property tax assessments for 15 years. This means the added value of your solar installation is excluded from your property assessment for 15 years from the date of installation. Local municipalities must opt in to this exemption, and the vast majority in New York have done so — but you should confirm with your local assessor's office. The exemption can be worth $200–$600/year depending on your solar system size and local tax rate.

Is solar equipment exempt from New York sales tax? ▼

Yes — New York State exempts residential solar energy systems from state sales tax (currently 4%) under Tax Law Section 1115(kk). Many counties also extend the sales tax exemption to their local portion. For a $25,000 system, this saves approximately $1,000–$2,000 in sales tax that you'd otherwise pay. Your installer should automatically apply this exemption to your purchase — if they don't mention it, specifically ask. The exemption covers panels, inverters, mounting hardware, and battery storage that is part of a solar system.

What are the best areas of New York for solar? ▼

Long Island and Westchester are among the most attractive areas for solar in New York: they have some of the highest electricity rates in the US ($0.20–$0.35/kWh from PSEG-LI and Con Edison), excellent solar installer competition, and strong net metering. Upstate New York has lower electricity rates (National Grid, RG&E) which lengthens payback periods, but the incentives still apply statewide. New York City boroughs can have roof access challenges for multifamily buildings, but the incentives are the same. Community solar is a viable alternative if roof installation isn't feasible — NYS has one of the most developed community solar markets in the US.

What is community solar and is it available in New York? ▼

Community solar (sometimes called "shared solar") lets you subscribe to a share of a solar farm — typically located outside your property — and receive bill credits for your share of the power produced. New York has one of the most active community solar markets in the US, with dozens of projects across all utility territories. There's typically no upfront cost and you receive 5–15% off your electricity bill. Community solar is ideal if you rent, have a shaded or unsuitable roof, live in a co-op or condo, or simply prefer not to manage a rooftop system. Search "NY community solar" at nyserda.ny.gov to find available subscriptions in your area.

Sources: NYSERDA NY-Sun Megawatt Block (nyserda.ny.gov/ny-sun, 2025–2026); New York Tax Law Section 1115(kk) — sales tax exemption; New York Real Property Tax Law Section 487 — property tax exemption; NYPSC VDER and Net Metering Orders; NYS Dept of Taxation IT-255 Form instructions (2025). Incentive rates change as blocks fill — always verify current rates with a NYSERDA-approved installer before installation.