Last updated: March 8, 2026
On December 31, 2025, the federal solar tax credit (Section 25D) expired for homeowner-purchased systems. Yes, that’s bad news for most solar owners — but there’s also good news. PPA and lease systems may still access the commercial Section 48E credit, provided construction begins by July 4, 2026 and the system is placed in service by December 31, 2027. Confirm timeline with your installer in writing if considering a lease or PPA.
Here’s what makes New York different from other states: you’re paying some of the highest electricity rates in the nation, averaging $0.20 to $0.28 per kilowatt-hour, depending on your utility. When electricity costs that much, generating your own power can be financially viable, even without the federal credit.
New York Solar Incentives: 2026 Overview
New York offers a mix of state rebates, tax credits, and utility programs that collectively reduce solar installation costs by 40-60% depending on your location and income level. Unlike some states that rely heavily on net metering alone, New York provides upfront rebates that lower your out-of-pocket costs immediately.
What Solar Incentives, Rebates & Tax Credits Are Available in New York in 2026?
NY-Sun Megawatt Block Incentive
New York’s NY-Sun program provides upfront rebates based on system size, customer type, and utility region. The incentive is applied directly by your installer, lowering your total project cost before payment. Standard-income rebates are no longer available in Con Edison and Upstate territories — only low-income households (≤80% AMI) qualify for remaining incentives in those regions.
New York State Solar Equipment Tax Credit
New York offers a state income tax credit worth 25% of eligible solar costs after any NY-Sun rebates are applied, up to $5,000. Applies to both purchased and leased systems. Unused credit can be carried forward for up to five years.
NYS Solar Property Tax Exemption
Residential solar systems are exempt from property tax increases for 15 years. While solar may raise your home’s value, your assessed taxes will not increase to reflect that added value during the exemption period. Some municipalities have opted out — verify with your local assessor before installing.
NYC Solar Property Tax Abatement
NYC homeowners may qualify for a property tax abatement equal to 7.5% of system cost per year over four years — totaling 30% of net system cost. Requires filing by a registered architect or professional engineer with the NYC Department of Buildings.
NYS Solar Sales Tax Exemption
Solar equipment and installation labor are exempt from New York State sales tax. Many counties and New York City also waive local sales tax, making the total exemption higher than the state rate alone.
Net Metering & VDER Compensation
Most New York residential solar customers can still access traditional net metering with 1:1 bill credits as of 2026 — significantly better than California’s NEM 3.0. Some utilities and project types fall under VDER (Value of Distributed Energy Resources) instead. Ask your installer to model both options for your location.
NYSERDA Residential Battery Storage Incentive
NYSERDA offers a statewide upfront rebate for residential battery storage systems, available to all New York homeowners through NYSERDA-approved contractors. Rebates are based on usable capacity (kWh) and applied directly at installation. Operates on a declining block structure — act sooner for higher rates.
PSEG Long Island Battery Storage Rewards
Long Island homeowners (LIPA service territory) may qualify for an additional battery rebate through PSEG LI’s Battery Storage Rewards program, separate from the NYSERDA statewide incentive above. Requires enrollment in the Dynamic Load Management (DLM) demand response program, which allows PSEG to draw from your stored energy during peak grid events. Confirm current rebate rate directly with PSEG LI.
Understanding NY-Sun Megawatt Block Rebates
The NY-Sun Megawatt Block Program is New York’s primary solar incentive. It provides upfront rebates that your installer applies directly to reduce your system cost—you never pay the full price and wait for reimbursement.
How the MW Block System Works
NYSERDA divides New York into three regions, each with its own funding allocation:
- Con Edison Region: NYC and Westchester County
- Upstate Region: Everything else except Long Island
- PSEG Long Island Region: Nassau and Suffolk Counties
Each region operates on a “block” structure. Think of blocks like buckets of funding that get filled as people install solar. Once a block fills up, NYSERDA moves to the next block with a lower rebate rate. This declining structure encourages early adoption.
As of early 2026, here’s where the blocks stand according to NYSERDA’s real-time dashboards:
Current MW Block Rates (early 2026)
| Region | Standard Rate | Low-Income Rate | Block Status |
|---|---|---|---|
| Con Edison | $0.40/watt | $0.80/watt | Block 11 (active) |
| Upstate | $0.20/watt | $0.80/watt | Final blocks (filling fast) |
| PSEG Long Island | CLOSED | $0.40/watt | Residential blocks exhausted |
Source: NYSERDA MW Block Dashboards
What This Means for Your Solar Installation
For a typical 7 kilowatt (kW) residential system:
Upstate Example (Low-Income Households Only — Standard Block Closed Dec 17, 2025):
- System size: 7,000 watts
- Upstate low-income rate: $0.80/watt
- MW Block rebate: $5,600 (for households ≤80% AMI)
Standard-income Upstate households are no longer eligible for MW Block rebates.
Con Edison Example (Low-Income Households Only — Standard Block Closed May 29, 2025):
- System size: 7,000 watts
- Con Ed low-income rate: $0.80/watt
- MW Block rebate: $5,600 (for households ≤80% AMI)
Standard-income Con Edison residential customers are no longer eligible for MW Block rebates as of May 29, 2025.
Low-Income Household (Upstate):
- System size: 7,000 watts
- Upstate low-income rate: $0.80/watt
- MW Block rebate: $5,600
The low-income rebate (officially called the Affordable Solar Residential Incentive) is available to households at or below 80% of area median income. For a family of four in Upstate New York, that’s approximately $64,000 annual income or less as of 2026.
How to Access MW Block Rebates
You don’t apply for MW Block rebates yourself. Your solar installer must be a participating NY-Sun contractor, and they handle the entire application process on your behalf. The rebate amount gets subtracted from your installation cost before you pay anything.
To verify your installer is NY-Sun approved, check NYSERDA’s contractor directory. Note: as of March 2026, MW Block incentives for standard-income customers are closed in both the Con Edison and Upstate regions. Only low-income households (≤80% AMI) are currently eligible for rebates in these territories. Verify current block status at nyserda.ny.gov before signing any contract.
New York State Solar Tax Credit: 25% Up to $5,000
New York offers a state income tax credit equal to 25% of your net solar system cost (after the MW Block rebate is subtracted), with a maximum credit of $5,000.
How the State Tax Credit Works
Unlike the former federal tax credit, New York’s state credit has one major advantage: it applies to both purchased AND leased solar systems. If you sign a 10-year lease or power purchase agreement, you still qualify for this credit.
Calculation Example:
Total system cost: $21,000
MW Block rebate: -$1,400
Net cost: $19,600
State tax credit (25%): $4,900
In this case, you’d receive a $4,900 credit against your New York State income tax liability when you file your annual taxes.
What If You Don’t Owe Enough Tax?
If your state tax liability is less than $4,900, you don’t lose the remaining credit. New York allows you to carry forward unused credit for up to five years. This makes the credit accessible even for households with lower tax liability.
How to Claim the Credit
You claim the solar tax credit by filing Form IT-255 with your New York State income tax return. The credit applies to the tax year when your system receives Permission to Operate (PTO) from your utility—not necessarily when you sign the contract or make payments.
For example, if your system is installed in December 2025 but doesn’t receive PTO until February 2026, you claim the credit on your 2026 tax return filed in early 2027.
Source: NYSERDA Solar Financing Information
Property Tax Exemption: 15 Years of Savings
When you install solar panels, your home’s market value typically increases by $15,000 to $25,000. Normally, that increased value would trigger higher property taxes. New York’s solar property tax exemption prevents that.
How the Exemption Works
For 15 years from your installation date, the added value from your solar system is completely exempt from property tax assessment. Your home is worth more, but your property taxes don’t increase to reflect that additional value.
Real Dollar Example:
- Solar system adds $20,000 to home value
- Property tax rate: 2.5% (common in Nassau County)
- Annual property tax you’re NOT paying: $500
- 15-year total savings: $7,500
The exemption applies automatically in most New York municipalities. You typically don’t need to file a special application—the exemption gets applied when your solar system receives proper permits.
Municipal Opt-Outs
Some New York municipalities have opted out of this exemption. Before assuming the exemption applies, verify with your local tax assessor’s office. If your municipality opted out, solar installations will be included in your property tax assessment.
This is different from California’s solar property tax exemption, which is permanent and has no opt-outs. New York’s 15-year limitation means that after year 15, the solar system’s value can be included in your property tax assessment.
Source: NYS Real Property Tax Law §487
NYC Solar Property Tax Abatement: 30% Over Four Years
If you live in New York City, you qualify for an additional incentive on top of all the state programs: the Solar Electric Generating Systems (SEGS) property tax abatement.
How the NYC Abatement Works
The SEGS program provides a property tax abatement equal to 7.5% of your solar system cost (after NYSERDA rebate) per year for four years—totaling 30% of your system cost.
This abatement appears as a credit on your annual property tax bill. You don’t receive a check; your property taxes simply decrease by the abatement amount.
Example Calculation:
System cost: $30,000
NYSERDA MW Block rebate: -$2,800 (7kW × $0.40/watt)
Net cost: $27,200
Annual abatement (7.5%): $2,040
Total 4-year abatement: $8,160
The abatement is capped at $62,500 per year or the amount of your actual property tax liability, whichever is less. The total lifetime cap is $250,000.
Application Requirements
Unlike the state property tax exemption, the NYC abatement requires active application. You or your solar installer must hire a New York State registered architect or professional engineer to file the necessary paperwork with the NYC Department of Buildings.
Most experienced NYC solar installers handle this process as part of their service, but verify this during contract negotiation. The abatement applies to systems placed in service between January 1, 2024 and January 1, 2035.
Can You Stack NYC Programs?
Yes. NYC residents can combine:
- MW Block rebate ($2,800 in example above)
- NYS tax credit ($5,000 maximum)
- NYC property tax abatement ($8,160 over 4 years)
- Sales tax exemption (~$2,400)
- 15-year property tax exemption (separate from abatement)
This stacking makes NYC one of the most financially attractive places to install solar in New York, despite higher average installation costs.
Source: NYC SEGS Tax Abatement Program
Net Metering vs. VDER: What New York Homeowners Need to Know
New York is in the middle of transitioning from traditional net metering to a new billing system called VDER (Value of Distributed Energy Resources), also known as the Value Stack. Understanding the difference matters for your solar economics.
Traditional Net Metering (Still Available)
Net metering is straightforward: For every kilowatt-hour your solar system sends to the grid, you receive a 1:1 credit. If you export 100 kWh in the afternoon and use 100 kWh from the grid that evening, your net usage is zero.
Most residential solar customers in New York can still choose traditional net metering as of 2026. This is a significant advantage compared to states like California, where NEM 3.0 drastically reduced export values by 70-75%.
VDER / Value Stack (Gradual Rollout)
VDER calculates the value of your solar exports based on five components:
- LBMP (Locational Based Marginal Price): Wholesale electricity cost at your location
- ICAP (Installed Capacity): Grid capacity value
- E (Environmental): Environmental benefits
- DRV (Demand Reduction Value): Reducing peak demand
- LSRV (Locational System Relief Value): Grid relief in constrained areas
The VDER structure can sometimes provide higher compensation than traditional net metering, especially if you’re in an area with grid congestion. However, it’s more complex to understand and predict.
Which Should You Choose?
During New York’s current Phase 2 transition, most residential customers can choose between net metering and VDER. Your installer should model both scenarios based on your specific location, utility, and usage patterns.
As a general rule:
- Net metering: Simpler, more predictable, works well for most homeowners
- VDER: Potentially higher value in certain locations, but more complex
Unlike California’s NEM 3.0 system, both options in New York provide fair compensation for solar exports. This means batteries are valuable for backup power but not financially essential the way they are in California.
Solar Programs by Utility Company
Your specific utility company determines which programs you can access and what your solar billing looks like. Here’s what to expect from New York’s major utilities.
Con Edison (NYC & Westchester)
Service territory: New York City and Westchester County
MW Block rate: $0.40/watt standard, $0.80/watt low-income
Net metering: Available (VDER phase-in occurring)
Community solar: Robust programs available
Con Edison customers also have access to the NYC property tax abatement if they live within NYC boundaries. The combination of higher MW Block rates and the NYC abatement makes this territory particularly attractive for solar adoption.
NYSEG (Central & Southern NY)
Service territory: Central and Southern New York
MW Block rate: $0.20/watt standard, $0.80/watt low-income
Net metering: Traditional net metering still primary
Additional programs: None beyond state programs
NYSEG territory falls under the Upstate region for MW Block purposes. While rebate rates are lower than Con Edison, installation costs also tend to be lower in Upstate markets.
National Grid (Buffalo, Albany, Syracuse)
Service territory: Buffalo, Albany, Syracuse regions
MW Block rate: $0.20/watt standard, $0.80/watt low-income
Net metering: Available
Additional programs: None beyond state programs
National Grid operates in the Upstate region. The company has been supportive of solar adoption and maintains straightforward net metering processes.
PSEG Long Island (Nassau & Suffolk)
Service territory: Nassau and Suffolk Counties
MW Block rate: CLOSED for standard residential (ended April 2016)
Low-income rate: $0.40/watt still available
Battery incentive: PSEG LI Battery Storage Rewards (separate from NYSERDA) — confirm current rebate rate directly with PSEG LI
PSEG Long Island is not the only New York utility with a battery incentive. NYSERDA offers a statewide residential battery storage rebate available to all NY homeowners: $200/kWh for Upstate utilities and $250/kWh in the Con Edison territory. Long Island homeowners can also access the PSEG LI Battery Storage Rewards program, which requires enrollment in the Dynamic Load Management (DLM) demand response program allowing PSEG to access stored power during peak grid events.
Source: NYSERDA Residential Energy Storage Incentive Program; nyserda.ny.gov/All-Programs/Energy-Storage-Program/
Last verified: March 2026
Rochester Gas & Electric (RG&E)
Service territory: Greater Rochester area
MW Block rate: $0.20/watt standard, $0.80/watt low-income
Net metering: Available
Additional programs: None beyond state programs
RG&E participates in the Upstate MW Block program and offers traditional net metering.
5 Steps to Maximize New York Solar Incentives
Step 1: Check MW Block Status for Your Region
MW Block funding is limited and operates on a first-come, first-served basis. Before signing any contract, verify current block status on NYSERDA’s dashboard.
The Upstate region is in its final blocks. Once those blocks fill, residential rebates may end entirely in that region.
Step 2: Verify Low-Income Eligibility
If your household income is at or below 80% of area median income, you qualify for rebate rates that are 4x higher than standard rates. This can be a $4,000-$5,000 difference.
Check current income limits on NYSERDA’s Affordable Solar page. Don’t assume you don’t qualify—the income thresholds are higher than many federal programs.
Step 3: Use a NY-Sun Approved Contractor
MW Block rebates are only available when you use a NY-Sun participating contractor. Your contractor handles all NYSERDA applications, so you never deal with the rebate paperwork yourself.
Verify contractor approval status on NYSERDA’s contractor directory. Get quotes from at least 3-5 approved contractors—solar prices can vary 20-30% between companies for identical equipment.
Step 4: Understand Your Utility’s Net Metering
Ask your installer whether your utility offers traditional net metering or requires VDER. Request modeling for both scenarios to see which provides better long-term value for your specific usage patterns.
Most residential customers still have access to traditional net metering as of 2026, but some utilities are accelerating VDER adoption.
Step 5: Document Everything for Tax Credits
You’ll need detailed documentation to claim the NYS tax credit:
- Itemized invoice showing equipment and installation costs
- MW Block rebate amount (shown separately on invoice)
- Permission to Operate (PTO) date from utility
- Contractor license and insurance information
Keep all documentation for at least five years, as the state tax credit can be carried forward if you don’t have sufficient tax liability in year one.
New York Solar Incentives FAQ
Q: Can I still get solar incentives in New York after the federal tax credit expired?
Yes. New York offers substantial state and local incentives that remain active in 2026. The MW Block rebate ($1,400-$5,600 for typical systems), state tax credit (25% up to $5,000), and property tax exemptions all continue to operate. While the federal credit’s expiration increased net costs by roughly 30%, New York’s high electricity rates ($0.20-$0.28/kWh) mean solar still provides strong financial returns with typical payback periods of 3-9 years.
Q: How much is the NY-Sun Megawatt Block rebate worth?
As of March 2026, standard-income MW Block incentives are closed in both the Con Edison region (closed May 29, 2025) and the Upstate region (closed December 17, 2025). The PSEG Long Island standard residential block closed in April 2016. Low-income households (≤80% AMI) still qualify for $0.80/watt in Con Edison and Upstate regions, and $0.40/watt on Long Island — translating to $5,600 for a typical 7 kW system upstate. Verify current block availability at nyserda.ny.gov before signing any contract.
Q: Does solar increase my property taxes in New York?
No, for 15 years. Solar installations are exempt from property tax increases under NYS Real Property Tax Law §487. If your solar system adds $20,000 to your home’s value, you won’t pay higher property taxes on that increase for 15 years from installation. Some municipalities have opted out of this exemption, so verify with your local assessor. After 15 years, the solar value can be included in your property tax assessment.
Q: What is the New York State solar tax credit?
New York offers a state income tax credit equal to 25% of your net solar system cost (after NYSERDA rebate), capped at $5,000. Unlike the former federal credit, this applies to both purchased and leased systems. Any unused credit can be carried forward for up to five years. You claim it using Form IT-255 when filing your state tax return.
Q: Is net metering still available in New York?
Yes. Most residential solar customers can still access traditional net metering (1:1 credit for exports) as of 2026. New York is gradually transitioning to VDER (Value Stack), which calculates credits differently, but Phase 2 allows customers to choose between net metering and VDER. This is significantly better than California’s NEM 3.0, which eliminated favorable export rates entirely.
Q: How do I qualify for the low-income solar rebate in New York?
You must meet NYSERDA’s Affordable Solar Residential Incentive requirements: household income at or below 80% of area median income (AMI). For a family of four in Upstate NY, that’s approximately $64,000 annual income as of 2026. Your NY-Sun contractor handles income verification as part of the application process. Low-income rates are 4x higher than standard rates ($0.80/watt vs $0.20/watt in Upstate).
Q: What is the NYC solar property tax abatement?
NYC offers a property tax abatement (not credit) equal to 7.5% per year for four years—30% total—of your system cost after NYSERDA rebate. The abatement appears as a reduction on your annual property tax bill, capped at $62,500/year or your actual tax liability. Systems must be installed between January 1, 2024 and January 1, 2035. Application requires filing through a registered architect or professional engineer.
Q: Are batteries worth it in New York?
Batteries provide valuable backup power during outages but are not financially essential in New York the way they are in California. New York’s favorable net metering means you receive fair credits for solar exports, so batteries are primarily for backup rather than economics.
NYSERDA offers a statewide residential battery storage rebate available to all NY homeowners — $200/kWh for Upstate utilities and $250/kWh in the Con Edison territory — through NYSERDA-approved contractors. For a 13.5 kWh Powerwall, that’s $2,700 Upstate or $3,375 in NYC/Westchester. PSEG Long Island customers may also access a separate utility rebate through the Battery Storage Rewards program (requires demand response enrollment).
Source: NYSERDA Residential Energy Storage Incentive Program (nyserda.ny.gov), March 2026
Next Steps (For Prospective Solar Owners)
Get Multiple Quotes
Solar installation prices vary significantly between contractors. Get at least 3-5 quotes from NY-Sun approved contractors to ensure competitive pricing.
What to ask contractors:
- Are you a NY-Sun participating contractor? (Required for MW Block rebate)
- What current MW Block rate applies to my project?
- Do I qualify for low-income rates?
- Will you handle all NYSERDA applications?
- Do you offer net metering and VDER modeling?
Verify Your Incentive Eligibility
Before signing any contract:
- Check current MW Block status for your region
- Verify income eligibility for Affordable Solar rates
- Confirm property tax exemption applies in your municipality
- If in NYC, understand NYC abatement application requirements
Act Before Blocks Close
The standard Upstate and Con Edison residential MW Block programs have both closed. Standard-income homeowners in these territories no longer have access to upfront NYSERDA solar rebates. Low-income households (≤80% AMI) still qualify and should act promptly, as low-income blocks also operate on a first-come, first-served basis.
Source: NYSERDA NY-Sun Operating Plan, July 2025; NYSERDA Program Manual v.20, September 2025
Last verified: nyserda.ny.gov, March 2026
If you’re considering solar in 2026, sooner is better than later for locking in current rebate rates.
Sources:
- New York State Energy Research and Development Authority (NYSERDA)
- NYSERDA MW Block Dashboards (real-time data)
- NYS Department of Taxation and Finance
- NYC Department of Buildings
- NYS Public Service Commission
- Database of State Incentives for Renewables & Efficiency (DSIRE)