New York is among the states with the highest electricity prices, but this also means homeowners who switch to solar can achieve major savings. New York offers several financial incentives for solar power.
The NY-Sun Megawatt Block Program offers cash rebates for homes and businesses, and through the New York State Solar Equipment Tax Credit, homeowners can also claim 25% of their solar project costs as a state tax credit. In this article, we at the Guides Home Team will discuss what you need to know about qualifying for these statewide incentives.
*In July 2024, SunPower notified dealers it would be halting all new shipments and project installations. The company also noted it would “no longer be supporting new Leases and PPA sales nor new project installations of these financing options.”
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New York State Solar Incentives
New York has two main incentive programs for solar energy systems: the NY-Sun Initiative Megawatt Block Program and the New York State Solar Equipment Tax Credit. These help offset the cost of any residential solar installation in the state. There’s also an incentive specifically for solar installations that include backup battery systems, called the Retail Energy Storage Incentive. We’ll discuss all three below.
NY-Sun Initiative Megawatt Block Program
Incentive Value: $0.20/watt in Con Edison area, $0.30/watt in upstate NY
Frequency: Once, when purchasing a solar panel system
The NY-Sun Megawatt Block Program is managed by the New York State Energy Research and Development Authority (NYSERDA). The program offers a cash incentive per watt of solar capacity, which varies based on where you live.
- The incentive rate for home solar systems is $0.20 per watt in the Con Edison service territory (New York City), and $0.30 per watt in upstate regions.
- Initially, the incentive was also available in Long Island, but program funding is already depleted for that region.
To qualify for the Megawatt Block Incentive, your solar energy system must be installed by an NY-Sun participating contractor and meet the technical requirements of the Program Manual. In addition to the NY-Sun Initiative, NYSERDA manages the NY Green Bank, which offers financing options for renewable energy projects of all scales.
New York State Solar Equipment Tax Credit
Incentive Value: 25% of home solar system costs, up to $5,000
Frequency: Once, when purchasing a solar panel system
New York offers a 25% state tax credit for home solar systems, which can be combined with the 30% federal tax credit. Unlike the NY-Sun rebate, which is available for homes and businesses, the state tax credit is exclusively for homeowners who install solar panels for their primary residence.
Retail Energy Storage Incentive
Incentive Value: $250 per kWh of solar battery capacity
Frequency: Once, when purchasing a battery system
The Retail Energy Storage Program offers incentives for battery systems paired with solar arrays. The current incentive rate is $250 per kilowatt-hour of storage capacity, which means a 10-kWh battery qualifies for $2,500. This was originally a statewide program, but funding is already depleted for all regions except Long Island.
New York Net Metering Explained
New York offers net metering for home solar systems up to 25 kW of capacity. If there is a month when your solar generation is higher than your consumption, you can roll the difference over to the next electric bill. New York also offers net metering for non-residential solar projects up to 750 kW.
How To Enroll in Net Metering
To participate in net metering, you must pay a Customer Benefit Contribution (CBC) charge. This ranges from 69 cents to $1.09 per kilowatt per month, depending on your utility company. This means a 10-kW rooftop solar system pays a monthly CBC charge of $6.90 to $10.90.
Federal Solar Tax Credit
The federal solar tax credit is a nationwide incentive called the Investment Tax Credit (ITC). You can claim 30% of your solar installation costs as a tax credit, and the benefit remains available through 2034.
According to the March 2023 Solar Market Insight Report, U.S. homeowners can expect to pay $3.30 per watt of solar capacity installed. For example, if you install a 6-kW home solar system for $19,800, you get a federal tax credit of $5,940 on your next declaration.
Estimated Solar Savings in New York
If you live on a property with abundant sunshine in New York, a 6-kW solar power system can generate more than 8,000 kWh per year. According to the U.S. Energy Information Administration, the average electricity tariff for New Yorkers is 22.46 cents/kWh. This means a 6-kW system can potentially save nearly $1,800 a year in utility bills.
A 6-kW home solar system costs around $19,800 according to the latest Solar Market Insight Report. However, the out-of-pocket cost is much lower after subtracting the incentives available in New York:
- The NY-Sun Program offers $0.20/watt in the Con Edison area (NYC), which is equivalent to $1,200 for a 6-kW system.
- The net price is reduced to $18,600 after the NY-Sun rebate, and you can then claim a 30% federal tax credit ($5,580) and 25% state tax credit ($4,650).
- After the total tax credit of $10,230, the net cost of your solar energy system is reduced to only $8,370.
With expected savings of $1,800 per year, the payback period is only four to five years. High-quality solar panels come with a 25- or 30-year warranty—much longer than their payback period.
The Top Solar Installation Companies in New York
Going solar is worth it for many homeowners in New York state based on the high cost of electricity bills alone, but choosing the right solar company for your needs and budget can be a challenge. To make this process easier, we have compiled a list of the top solar installers operating in New York and we recommend getting quotes from at least three providers before making a final decision.
| Company | Star Rating | Cost of an 8 kW System* | BBB Rating | Visit Site |
|---|---|---|---|---|
Our Top Pick
| 4.2 | $20,000–$25,000 | A+ | GET QUOTE |
4.2 | N/A | A+ | GET QUOTE | |
| 4.7 | $20,000–$25,000 | A+ | GET QUOTE |
| 4.3 | $20,000–$25,000 | A+ | GET QUOTE |
4.0 | N/A | N/A | GET QUOTE | |
| 4.0 | $20,000–$25,000 | A+ | GET QUOTE |
| Company | BBB Rating | Star Rating | Cost of an 8 kW System* | Visit Site |
|---|---|---|---|---|
Our Top Pick
| A+ | 4.2 | $20,000–$25,000 | GET QUOTE |
| A+ | 4.2 | N/A | GET QUOTE | |
| A+ | 4.7 | $20,000–$25,000 | GET QUOTE |
| A+ | 4.3 | $20,000–$25,000 | GET QUOTE |
| N/A | 4.0 | N/A | GET QUOTE | |
| A+ | 4.0 | $20,000–$25,000 | GET QUOTE |
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The Bottom Line
New York offers a rebate program and state tax credit for solar panel systems, and local electricity rates are 52% higher than the U.S. average. New York residents who move to solar may achieve a payback period of less than five years. Top NY solar companies have ample experience with these incentive programs and can make sure your project qualifies.
Frequently Asked Questions About New York Solar Incentives
Yes, the New York state solar tax credit is worth 25% of your solar installation costs from state income taxes, up to a maximum amount of $5,000.
According to the latest Solar Market Insight Report (March 2023), U.S. residential solar systems have an installed price of around $3.30 per watt.
No, New York does not have any programs offering free solar panels as of 2023. You can get a cash rebate from the NY-Sun Megawatt Block Program, but it covers less than 10% of your solar installation costs.
Yes, probably. New York offers two major incentive programs for solar panels as a way to offset local electricity prices that are among the highest in the country.
Methodology: Our System for Ranking the Best Solar Companies
We closely evaluate solar installation companies with a focus on the factors most important to homeowners like you. We based our solar company methodology on input from multiple homeowner surveys, discussions with industry experts and research into the renewable energy market. Our review process involves assessing each company on the following criteria, which we then use to calculate a rating out of 5 stars.
- Cost and payment options (20 points): Cost is one of the most important factors when installing a solar energy system. Solar providers that offer cash purchases and in-house loan financing earn full points in this category. Companies also receive bonus points for offering solar panel leasing or power purchase agreements (PPAs).
- Services (20 points): In addition to solar installations, companies offering backup battery and electric vehicle charger installations, energy efficiency audits and system monitoring earn the most points in this category. Companies can also receive points for completing installations in-house, as opposed to using third-party contractors.
- Reputation (20 points): To assess the reputation of each company, we consider Google star ratings, Better Business Bureau (BBB) scores and reviews, and NABCEP certification status. We also look at customer complaint rates on sites like the BBB and weigh how the company responds.
- Warranty (15 points): We verify that each company offers workmanship, product and performance warranties on all of its solar installs. A provider earns more points for extending warranties that meet or exceed industry standards, including 10 years for system workmanship and products and 25 years for panel performance.
- Customer Support (10 points): Solar companies that offer virtual consultations, a mobile app, 24/7 customer support and high customer satisfaction with backend support earn the most points in this category.
- Industry Experience (10 points): Providers with 10 or more years of experience in the solar installation industry earn a perfect score in this category.
- Sustainability (5 points):To measure sustainability, we assess each company based on whether it shares a detailed sustainability statement or ESG disclosures on its website. We also conduct research to see if companies offer end-of-life panel disposal programs or have eco-friendly community partnerships.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.
