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How to Save Money on Solar Panels in New York

Solar panels on a background of blue sky with a flagpole and the flag State of New York

How to Save Money on Solar Panels in New York

Key Points

  • New York has a 70% renewable energy target by 2030 and 100% carbon-free electricity by 2040, with a 10GW solar carve-out.
  • Homeowners in New York can save nearly $20,000 on utility bills with a 6kW solar system, thanks to federal and state incentives.
  • New York offers a 25% state tax credit, a solar rebate per kW installed, and net metering regulations that can result in a paycheck for excess energy.

In 2022, the Empire State had over 4.4MW of solar energy, making it the 4th leading state for the renewable technology. Supported by some of the most aggressive energy standards, homeowners could save thousands on solar panels in New York.

But with the high cost of equipment, how do you even afford an array? Homeowners in New York have access to incredible incentives, including state tax credits, rebates, and more. Continue reading for a breakdown of all the available solar benefits.

How to Save Money on Solar Panels in New York: Overview

Although New York has high equipment rates and poor sunlight, it seems that homeowners can still save money by making the switch to solar. That’s because the Empire State has expensive electricity costs, which help to offset the price of an array. Those that purchase a 6kW system in New York could save nearly $20,000 on utility bills alone.

However, the benefits don’t end there; solar panels in New York receive some of the most support among any other state in the country. Backed by aggressive renewable standards, homeowners have access to a wide variety of incentives, including federal and state returns. Some regulations can even result in a paycheck. Let’s dig into these further.

Solar Panels in New York: Federal Incentive

Before you go further, you should seriously consider utilizing the federal solar tax credit. This incentive offers a 30% return on all solar purchases for your home, which includes equipment, labor, and sales tax. Those that apply this benefit to a 6kW system could save more than $5,000.

Be mindful, there are a few requirements to qualify for the federal incentive. First and foremost, you must own the system outright. This program lasts until 2035 unless it’s extended.

New York’s State Credits and Rebates

If you thought $5,000 was a good saving, why not add another 25% to that? New York offers a sizeable state tax credit alongside the federal one, making it incredibly easy to invest in solar. While it’s capped at $5,000, a 6kW system doesn’t quite touch that. 

Additionally, New York offers a solar rebate per kW installed for up to 25kW. In some areas, you can receive $300 per kW (or $1,800 for 6kW). The program offers even more for low-income households, for about $800/kW. Between this rebate, the federal incentive, and the state credit, some New Yorkers could save nearly $15,000.

The Empire State also has a great net metering regulation. This is a mandate that requires utility companies to pay for excess solar energy connected to the grid. This payment comes in credit toward the next month’s utilities and continues to roll over until the end of the year. At that point, a check is written for the excess energy at the avoided-cost rate.

A child and her mother in the fresh open air, beside solar panels on a sunny day at a farm in New York State, USA.
Homeowners could save over $15,000 on solar panels in New York from rebates, tax credits, and other incentives.

Solar Panels in New York: Government Regulations

These incredible benefits come from an aggressive renewable portfolio standard (RPS) We use a state’s RPS to determine its intention to invest in future clean energy. In 2020, New York expanded its RPS to target 70% renewable energy by 2030 and 100% carbon-free electricity by 2040.

Additionally, the Empire State has a solar carve-out. This is a mandate that requires a portion of its renewable energy to come from solar technology. New York has a 10GW solar carve-out by 2030. It currently sits at around 4.4GW.

To facilitate this, New York’s legislature made solar purchases exempt from both sales and property taxes. This means that your solar array won’t come with a sales tax, saving 4% overall. Additionally, your house won’t incur an increased property tax for its higher value. This exemption las for 15 years, saving you hundreds if not thousands over the period.

Should New Yorkers Lease Solar?

In many states, homeowners have the option to lease solar panels, making it easy to switch without having the upfront funds to pay for the system. While solar leasing typically disqualifies people from major incentives, including the federal solar tax credit, it does mean you don’t have to handle maintenance.

Fortunately, residents have the option to lease solar panels in New York. However, with some of the best incentives in the country, this is not wise. Especially if you’re low-medium income, you could cut the cost of an installation by nearly 80% with all the benefits applied. Not only will this save you on installation, but you’ll earn much more back without paying a monthly lease.

Solar Panels in New York: Incentive Summary

BenefitAccessibility
Federal Tax Incentive30% credit
New York Tax Credits / Rebates25% credit up to $5,000 / $0.30/W for homeowners in upstate NY for up to 25kW; $0.80/W for low-income households
Net MeteringYes, the annual check paid at an avoided-cost rate
Renewable Portfolio Standard70% by 2030, 100% by 2040
Property Tax Exemption100% for 15 years
Sales Tax Exemption100%
Performance Payment ProgramNone

Frequently Asked Questions

Do you actually save money by going solar in New York?

Homeowners in New York can save thousands on electricity bills with solar energy. While considering the high rates on equipment and poor sunlight, New Yorkers can earn back over $20,000 on utilities over 25 years.

How long does it take for solar panels to pay for themselves in New York?

With an average electricity bill of $1,478.04, New Yorkers can offset the price of a 6kW solar system in about 11.6 years.

How much do solar panels cost in New York?

In New York, homeowners can expect to pay about $2.87 per watt for solar energy. This equals about $17,160 for a 6kW system.

Can I use the federal tax incentive in New York?

Homeowners in New York can utilize the federal solar tax credit. This program offers a 30% return on all purchases made toward an array, including equipment, labor, and sales tax. Those that install a 6kW system could save over $5,000.

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