Is Solar Worth It in New York? 2026 Guide

Published April 16, 2026  ·  10 min read  ·  Part of our Solar by State series

New York is not the sunniest state in the country. At 4.0 to 4.5 peak sun hours per day, it sits well below the national average of 4.5. What makes New York one of the strongest solar markets in the US is not the sun resource; it is the combination of high electricity rates, a 25% state income tax credit, and a net metering policy that ensures you get full value for everything your panels produce.

The incentive landscape has shifted significantly heading into 2026. The federal residential tax credit is gone. The NY-Sun upfront rebate program that once cut installation costs by $1,000 to $3,000 has closed its general-market funding. What remains is still compelling, but homeowners need an accurate picture before making a $20,000 to $30,000 decision.

This guide covers what New York homeowners actually need to know in 2026, organized by the questions that matter most.

A note on the federal tax credit

Many solar guides and installer websites still describe a 30% federal solar tax credit as available. It is not, for homeowners who purchase their systems directly. The Section 25D Residential Clean Energy Credit was repealed by the One Big Beautiful Bill Act, signed July 4, 2025. The IRS confirms the credit is not available for systems placed in service after December 31, 2025.

There is one nuance worth understanding: homeowners who finance solar through a lease or power purchase agreement (PPA) can still benefit indirectly from a 30% credit. The third-party company that owns the system claims the commercial Section 48E Investment Tax Credit and may pass those savings through to you as a discounted rate. New York, unlike Florida, does allow solar leases and PPAs, so this is a legitimate financing path. But to be clear: if you buy a solar system in New York in 2026, whether with cash or a loan, there is no federal tax credit to claim on your personal tax return.

New York solar incentives in 2026

New York State Solar Tax Credit

The most valuable incentive for most New York homeowners in 2026 is the state income tax credit: 25% of the net system cost (after any NY-Sun rebate is subtracted), up to a maximum of $5,000. This is a direct credit against your New York State income tax liability, not a deduction. A $25,000 system after rebates generates a $5,000 credit. You claim it on Form IT-255 when you file your state return.

If your tax liability in year one is less than the full credit amount, you can carry the unused portion forward to future tax years. There is no income limit to qualify. This credit is not refundable, so if you owe no state taxes, it provides no benefit; most homeowners who can afford solar have sufficient state tax liability to use it fully.

For more information and the current form, see the New York Department of Taxation and Finance solar credit page.

NY-Sun Megawatt Block Incentive

The NY-Sun program, administered by the New York State Energy Research and Development Authority (NYSERDA), is an ongoing initiative that provides upfront per-watt rebates for residential solar installations. The rebate is applied directly by your installer, reducing the price you pay before the state tax credit calculation. Funding is allocated in blocks by utility region; once a block fills, the current incentive level closes and a new block at a lower rate opens, if additional funding has been appropriated.

Right now, standard-income residential funding is exhausted in two of the three regions. The Con Edison region's standard residential MW Block closed May 29, 2025. The Upstate region's closed December 17, 2025. PSEG Long Island standard residential funding closed earlier. This means most New York homeowners cannot access a NY-Sun rebate today, but the program itself is not being shut down. New blocks can open when the state funds them.

What remains available is the Affordable Solar Residential Incentive for income-qualified households at or below 80% of Area Median Income. The rates are $0.80 per watt in the Upstate and Con Edison regions, and $0.40 per watt on Long Island. For a 7 kW system upstate, that is $5,600 in upfront savings. Your installer handles the application; you do not file separately. To verify income eligibility and find a participating contractor, visit NYSERDA's Affordable Solar page.

Standard-income homeowners should check the NY-Sun MW Block Dashboard for the latest funding status, as new blocks can open if additional funding is appropriated. Do not assume the program is permanently closed; it may reopen.

Sales tax exemption

New York exempts residential solar installations from the 4% state sales tax. New York City and many local jurisdictions also exempt local sales tax on solar equipment. On a $25,000 system, the state exemption alone saves $1,000. Confirm your county's local exemption status with your installer before finalizing your quote.

Property tax exemption

Under New York Real Property Tax Law Section 487, the added home value from a solar installation is exempt from property tax assessment for 15 years. Solar systems typically add $15,000 to $30,000 to a home's assessed value in New York. Without the exemption, that could translate to $300 to $600 per year in higher property taxes depending on your municipality's tax rate. Note that individual municipalities may opt out of this exemption. Confirm with your local tax assessor before relying on it.

NYC Solar Property Tax Abatement

New York City homeowners have access to an additional incentive not available elsewhere in the state: the NYC Solar Property Tax Abatement. This provides a credit against your NYC property tax bill equal to up to 30% of the solar system cost, spread over four years at roughly 7.5% per year. On a $25,000 system, that is up to $7,500 applied to your property taxes over four years. This stacks with the state income tax credit, making NYC one of the strongest solar markets in the country on an incentive basis despite its dense building stock and roof constraints.

Battery storage rebate

NYSERDA's Residential Energy Storage Incentive Program provides upfront rebates for home battery systems installed by an approved contractor. As of April 2026, the rebate is $200 per kWh of usable capacity for customers of upstate utilities (National Grid, NYSEG, Central Hudson, Orange and Rockland) and $250 per kWh for customers in the Con Edison territory (New York City, Westchester, and Rockland County). For a 13.5 kWh Tesla Powerwall, that is $2,700 upstate or $3,375 in the Con Edison region.

As of April 1, 2026, receiving this rebate requires enrollment in your utility's Bring Your Own Battery (BYOB) demand response program. Under that program, your utility can dispatch stored energy during peak grid events. Most homeowners find this a reasonable trade for the rebate value.

PSEG Long Island customers have a separate program: the PSEG LI Battery Storage Rewards Program, which also requires demand response enrollment in exchange for an upfront incentive.

New York electricity rates and utilities

New York's high electricity rates are the primary reason solar makes financial sense despite lower-than-average sun hours. As of early 2026, rates by utility are:

• Consolidated Edison (Con Edison) serves New York City and Westchester County. Con Edison customers pay approximately $0.22/kWh on average, among the highest residential rates in the continental US. Rate increases have averaged roughly 4% per year and are expected to continue. Systems up to 50 kW qualify for net metering under Con Edison.
• National Grid serves much of upstate New York including Long Island (transmission), Buffalo, Albany, and Syracuse. Residential rates are approximately $0.20 to $0.21/kWh. National Grid has been supportive of solar adoption and maintains a straightforward interconnection process.
• New York State Electric and Gas (NYSEG) serves a large geographic swath of upstate New York and the Southern Tier. Rates are approximately $0.19 to $0.21/kWh.
• PSEG Long Island (PSEG LI) operates Long Island's electric distribution system on behalf of the Long Island Power Authority (LIPA). Residential rates are approximately $0.21 to $0.23/kWh. PSEG LI administers its own solar interconnection process and the separate Battery Storage Rewards Program.
• Central Hudson and Orange and Rockland serve the Hudson Valley and areas northwest of New York City. Both participate in the upstate NY-Sun region and offer net metering to residential customers.

Net metering in New York: Phase One vs. VDER

New York offers two billing options for solar customers. Most residential homeowners choose Phase One net metering, but it is worth understanding both.

Under Phase One net metering, you receive a full retail-rate credit for every kilowatt-hour your solar system exports to the grid, the same rate you pay to buy power from your utility. Credits roll over month to month. There is no annual true-up cash payment for excess credits the way Florida offers; instead, accumulated credits offset future bills indefinitely. All new solar customers since January 2022 also pay a monthly Customer Benefit Contribution (CBC) charge based on system size. The CBC varies by utility and system size, but typically runs $0.69 to $1.09 per kilowatt of system capacity per month. For a 7 kW system, that is roughly $5 to $8 per month. The CBC is a real cost, but Phase One net metering is still generally the more financially favorable option for most residential customers.

The Value of Distributed Energy Resources (VDER) tariff, sometimes called the Value Stack, compensates solar owners based on five components: energy value, capacity value, environmental value, demand reduction value, and locational system relief value. The total credit can be higher or lower than the retail rate depending on when and where you export. VDER can be advantageous for larger systems in areas with high locational relief value, but for typical residential customers Phase One is usually simpler and similarly valued. NYSERDA's net metering guide explains both options and includes a Value Stack calculator link.

Residential systems up to 25 kW qualify for net metering with most utilities. Con Edison allows up to 50 kW for residential customers.

Sun resource and typical system performance

New York averages 4.0 to 4.5 peak sun hours per day. New York City and Long Island run closer to 4.4 to 4.5, while the Adirondacks and far northern parts of the state run toward 3.8 to 4.0. These numbers are below both the national average and the sun resources of the southern states we have covered in this series.

What matters for the financial calculation is not sun hours in isolation but sun hours multiplied by the value of each kilowatt-hour. At $0.22/kWh (Con Edison), a kilowatt-hour of solar production in New York is worth more than one produced in Texas at $0.15/kWh. The high electricity rates in New York largely offset the lower sun resource, which is why payback periods in New York are competitive with sunnier but lower-rate markets.

A typical 8 kW system in the New York City area produces approximately 9,000 to 10,000 kWh per year. The average New York home uses around 7,000 to 8,000 kWh annually, so a well-sized system can cover most or all of your electricity needs.

System costs and payback in 2026

Solar installation costs in New York run higher than the national average, partly due to labor costs and the complexity of urban and suburban installations. The average residential cost is approximately $2.80 to $3.00 per watt as of early 2026. A typical 8 kW system runs $22,400 to $24,000 before incentives.

Applying the available incentives for a standard-income homeowner outside NYC:

• Sales tax exemption (4% state): saves approximately $900 to $960
• NY state tax credit (25%, up to $5,000): saves $5,000 on most systems this size
• NY-Sun rebate: currently $0 for standard-income households (closed)
• Net cost after incentives: approximately $16,400 to $18,000

At Con Edison's rate of $0.22/kWh, an 8 kW system saving 9,000 kWh per year avoids roughly $1,980 in annual electricity costs. That puts payback at approximately 8 to 10 years for a cash purchase. Con Edison customers benefit from the fastest payback in the state given their rates. Upstate customers at $0.19 to $0.21/kWh see payback in roughly 9 to 12 years.

NYC homeowners who qualify for the Solar Property Tax Abatement shorten that payback further. On a $23,000 system with a $5,000 state credit and $6,900 abatement, the net cost falls to around $11,100 before sales tax savings, putting payback potentially under 8 years at Con Edison rates.

Over 25 years, a New York homeowner with solar can expect to avoid $40,000 to $60,000 in electricity costs depending on utility, system size, and how much rates continue to rise. Given New York's rate trajectory, the higher end of that range is increasingly likely for Con Edison customers.

Should you add battery storage?

Battery storage is not financially essential in New York the way it is in California or Arizona, because Phase One net metering gives you full retail-rate credit for exports. You do not lose significant value by sending excess solar to the grid.

The case for storage in New York is primarily about resilience and the NYSERDA rebate. Northeastern winters bring ice storms and nor'easters that can knock out power for days. A battery keeps your essential loads running during outages in a way that solar-only systems cannot. The NYSERDA rebate of $200 to $250 per kWh meaningfully reduces the cost: for a 13.5 kWh Powerwall, the rebate covers $2,700 to $3,375 of the roughly $10,000 to $14,000 installed cost.

The demand response enrollment requirement (as of April 2026) means your utility can dispatch a portion of stored energy during grid peak events. In practice, this has minimal impact on most homeowners' usage patterns, and the rebate offsets the inconvenience for most people.

Installer and interconnection responsibilities

Knowing who handles what prevents delays and surprises during your installation.

• Your installer is responsible for: system design and engineering, pulling all required permits from your municipality, submitting the interconnection application to your utility, coordinating the utility inspection, handling any NY-Sun rebate paperwork if applicable, and activating the system once Permission to Operate is granted. For NYC projects, your installer should also initiate the Solar Property Tax Abatement application if you are eligible.
• You are responsible for: selecting a qualified installer (verify they are a NYSERDA-approved NY-Sun contractor to access any state rebates), ensuring your roof is in good condition before installation, signing the interconnection agreement with your utility, choosing between Phase One net metering and VDER, filing Form IT-255 with your state tax return to claim the 25% credit, and notifying your homeowner's insurance provider.
• Your utility is responsible for: reviewing and approving the interconnection application, installing or upgrading the bi-directional meter, conducting the utility-side inspection, and activating net metering on your account.

Interconnection timelines in New York vary significantly by utility and location. Con Edison's queue in New York City can run 8 to 16 weeks from application to Permission to Operate. Upstate utilities are generally faster, typically 6 to 10 weeks. Ask your installer for a current timeline estimate based on recent projects in your area.

A note on New York City specifically

New York City presents unique solar considerations that differ from the rest of the state. Most NYC residents live in apartments and do not own their roof, which means solar is not an option. For homeowners in Brooklyn, Queens, Staten Island, and the Bronx who do own their properties, solar is often highly attractive due to Con Edison's high rates, the NYC abatement, and the strong state tax credit. Manhattan single-family homes are rare, but do exist.

NYC also has specific permitting requirements and fire code setback rules that affect system design, and some buildings have landmark or zoning restrictions. A contractor who regularly works in the five boroughs will know these requirements. Do not hire a contractor whose primary experience is upstate or suburban; the permitting environment is materially different.

For renters or condo owners in New York City who want to access solar savings, community solar (Community Distributed Generation) is the primary option. You subscribe to a share of an offsite solar farm and receive bill credits without installing anything on your property. This is not covered in depth here since this guide focuses on homeowner-installed systems, but it is worth exploring if you rent or live in a multi-unit building.

Bottom line: Is solar worth it in New York in 2026?

Yes, for most homeowners who own their property and have a suitable roof. New York's high electricity rates, robust 25% state tax credit, and strong net metering policy make solar a financially sound investment even without the federal tax credit and with lower-than-average sun hours. NYC homeowners with access to the property tax abatement have an especially strong case.

The key things to understand going in: the federal ITC is gone, the NY-Sun standard rebate is closed, and the incentive picture looks meaningfully different than it did two years ago. The state tax credit does a lot of the heavy lifting now. Make sure any quote you receive reflects the current incentive status, not outdated assumptions about federal credits or NY-Sun rebates.

Get at least three quotes from NYSERDA-approved contractors, ask each one to provide a written 25-year savings projection using your utility's current rates, and verify that their numbers do not include a federal tax credit.