If you are searching the New York solar tax credit for 2026, here is the headline: the 30 percent federal solar tax credit that homeowners leaned on for years ended after December 31, 2025, but New York’s own tax breaks did not go anywhere. New York still gives homeowners a 25 percent state tax credit worth up to $5,000, homeowners in New York City can claim a separate city property-tax abatement worth 30 percent of the system cost, and every New York homeowner skips the state sales tax and the added property tax their panels would normally create. This page separates what ended from what still pays, so a New York homeowner going solar in 2026 can plan on facts instead of an out-of-date 30 percent number.
Updated for 2026 with New York’s current state solar credit, the New York City property-tax abatement, and the tax exemptions that still apply this year.
New York solar tax credits in 2026, at a glance
- The 30 percent federal solar tax credit ended after December 31, 2025. A homeowner who buys solar in 2026 cannot claim the federal Residential Clean Energy Credit (Section 25D), which the One Big Beautiful Bill Act ended early (IRS, as of January 1, 2026).
- New York’s own state credit is 25 percent of your system cost, capped at $5,000. The New York State Solar Energy System Equipment Credit is claimed on Form IT-255 and even lease and PPA customers can qualify (NY Dept. of Taxation and Finance, as of 2026).
- New York City homeowners can claim a separate property-tax abatement worth 30 percent of the system cost. New York City’s solar abatement returns 7.5 percent of eligible cost per year for four years for systems placed in service before January 1, 2035 (NYC Department of Finance, as of 2026).
- Solar is exempt from the 4 percent state sales tax, and its added value is exempt from property tax for 15 years. The property-tax exemption comes from RPTL Section 487, though a few localities opt out (NY Tax sales-tax bulletin; NY Senate, RPT 487, as of 2026).
- New York power is expensive, which is what makes the math work. New York residential electricity averages about 28.55 cents per kWh, well above the national average (EIA, as of March 2026).
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Did the 30 percent federal solar tax credit go away in New York?
Yes. The federal residential solar tax credit ended for systems placed in service after December 31, 2025. The 30 percent Residential Clean Energy Credit (Section 25D) was the credit homeowners claimed on their federal return for buying a home solar system, and the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended it early, so it no longer applies to property placed in service after December 31, 2025 (IRS, as of January 1, 2026). You will still find New York installer pages and guides quoting the old 30 percent figure, some even saying it runs through 2032. For a New York homeowner buying in 2026, that is out of date. For the full national picture, see what the end of the federal solar tax credit means in 2026.
One federal exception exists, and it is not the homeowner’s to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or power purchase agreement (PPA) system, not by the resident (IRS Clean Electricity Investment Credit, as of 2026). So on a lease or PPA you do not file for a federal credit yourself; the company that owns the panels does. The 25D homeowner credit, by contrast, ended after December 31, 2025.
Does New York have its own solar tax credit?
Yes. New York’s state solar tax credit is 25 percent of your system cost, capped at $5,000. It is the New York State Solar Energy System Equipment Credit, claimed on Form IT-255, and if the credit is larger than your tax bill in the first year you can carry the balance forward for up to five years (NY Dept. of Taxation and Finance, as of 2026). Unlike most state solar incentives, this one does not require you to own the system outright: New York lets you claim it whether you buy the system, sign a written lease, or sign a power purchase agreement of at least 10 years, with lease and PPA customers basing the credit on their qualified payments. That is unusual, and it means a no-up-front plan can still capture the state credit. The credit also follows your principal residence whether you own or rent it, so a New York renter who buys or leases qualifying equipment can claim it too (Form IT-255 instructions, as of 2026). This credit is entirely separate from the federal Residential Clean Energy Credit that ended after December 31, 2025. New York’s own 25 percent credit was not affected and stays in place for 2026.
The New York solar tax stack in 2026
The federal credit ended after December 31, 2025, so New York leans on a stack of state and city tax breaks instead. The table sorts what a New York homeowner gets in 2026 from what is gone, so you can budget around facts. The New York City property-tax abatement applies only inside the five boroughs; the other rows apply statewide.
| Tax benefit | Value in 2026 | Who qualifies | How you claim it |
|---|---|---|---|
| NY State Solar Energy System Equipment Credit | 25% of cost, capped at $5,000, 5-year carry-forward | New York homeowners who buy, lease, or sign a 10-year-plus PPA | Form IT-255 with your state income tax return (NY Tax) |
| NYC Solar Property-Tax Abatement | 30% of eligible cost (7.5%/yr for 4 years), NYC only, capped | Owners of solar on New York City property (Tax Class 1, 2, or 4) | Filed with the city through DOB NOW (NYC Dept. of Finance; NYC Business SEGS) |
| Real Property Tax exemption (RPTL 487) | 15-year exemption of the system’s added assessed value | New York owners, unless the locality opted out | Automatic in participating localities; confirm yours (NY Senate RPT 487) |
| State sales-tax exemption | 100% off the 4% state sales tax on equipment and installation | New York buyers of residential solar | Applied by the installer at purchase (DSIRE) |
| Federal Residential Clean Energy Credit (25D) | Ended for systems placed in service after Dec 31, 2025 | No 2026 homeowner-buyer | Not available; do not budget for it (IRS) |
For the broader picture, see our New York solar incentives hub, which also covers the NY-Sun rebate and net metering, and our guide to the solar incentives that still apply.
How much is New York’s 25 percent state credit worth?
The 25 percent credit is worth up to $5,000, and most residential systems hit that cap. Because the credit is a quarter of your system cost until it reaches $5,000, any system that costs about $20,000 or more maxes it out. The table below works the math at the 25 percent rate against a range of system prices, so you can find the row closest to a quote you are weighing. These are illustrations of how the credit is calculated, not a quote for your home, and the credit is capped at $5,000 regardless of how large the system is (NY Dept. of Taxation and Finance, as of 2026).
| System cost (before incentives) | 25% of cost | NY State credit you can claim (capped at $5,000) |
|---|---|---|
| $12,000 | $3,000 | $3,000 |
| $16,000 | $4,000 | $4,000 |
| $20,000 | $5,000 | $5,000 |
| $28,000 | $7,000 | $5,000 (cap) |
Two more taxes come off the table. New York exempts residential solar equipment and its installation from the 4 percent state sales tax, so a qualifying installer should not add state sales tax to the equipment on your contract (DSIRE, as of 2026). And under Real Property Tax Law Section 487, the value your panels add to your home is exempt from property tax for 15 years, so going solar does not raise your assessment, unless your city, town, or county is one of the few that opted out of the exemption (NY Senate, RPT 487, as of 2026).
What a typical New York system nets after the tax breaks
Put the pieces together and the New York tax stack takes a real bite out of the cost. The table below is our own worked example on a typical $20,000 residential system, one inside New York City and one elsewhere in the state, using the 25 percent state credit and, for the city home, the New York City abatement. These are illustrative figures on stated assumptions, not a quote, and the timing differs: the state credit lands on your income tax return for the install year, while the New York City abatement is spread across four years of property-tax bills.
| Line item | Inside New York City | Rest of New York State |
|---|---|---|
| Typical system cost, before incentives | $20,000 | $20,000 |
| NY State Solar Energy System Equipment Credit (25%, capped) | -$5,000 | -$5,000 |
| NYC Solar Property-Tax Abatement (30% over 4 years) | -$6,000 | not available |
| Effective cost after these New York tax breaks | about $9,000 | about $15,000 |
| Illustrative annual bill offset at 28.55 cents per kWh | about $2,280 a year | about $2,280 a year |
How to read this. The annual bill offset assumes a system that produces roughly 8,000 kWh a year, a typical figure for a well-sited New York home, valued at New York’s average residential rate of 28.55 cents per kWh (EIA, as of March 2026); your own production depends on your roof, so estimate it with NREL’s free PVWatts calculator. The two tax breaks shown are separate from the sales-tax exemption, which already lowers your purchase price, and from the RPTL 487 exemption, which keeps your assessment from rising. Confirm your own numbers with a written quote and a tax professional before you rely on them.
What is the New York City solar property-tax abatement?
If your solar is on a New York City property, the city abates part of your property tax for four years. New York City’s Solar Electric Generating Systems (SEGS) property-tax abatement is worth 7.5 percent of your eligible installation cost per year for four years, which comes to 30 percent of the cost in total, for a system placed in service on or after January 1, 2024 and before January 1, 2035 (NYC Department of Finance, as of 2026). Each year’s abatement is capped at the lesser of that 7.5 percent, your building’s annual property-tax bill, or $62,500, with a total cap of $250,000 per building over the four years, so a typical home system claims the full amount (NYC Business SEGS program, as of 2026).
It covers most New York City homes, and the paperwork runs on a calendar. The abatement applies to Tax Class 1 one-to-three-family homes as well as Class 2 and Class 4 buildings, and it is filed with the city through DOB NOW, the Department of Buildings’ online system that has replaced the old paper PTA-4 form (NYC Department of Buildings, PTA-4, as of 2026). File the abatement application by March 15 and it begins with the fiscal year that starts that July 1; file after March 15 and it starts the following year, but you do not lose it as long as your system is placed in service before January 1, 2035, with a final filing deadline of January 1, 2036.
Note: the city abatement and the statewide exemption are two different programs. The New York City SEGS abatement described here is separate from the statewide RPTL Section 487 property-tax exemption, which excludes your system’s added value from your assessment for 15 years. They are administered differently, and some property types that receive other city benefits are not eligible for the abatement, so confirm with the New York City Department of Finance which property-tax benefit applies to your specific installation before you count on either one.
How net metering fits with the tax credits
The tax breaks lower what you pay for the system; net metering lowers your monthly bill. A new residential system in Con Edison or upstate New York territory defaults to Phase One net metering, where the power your panels export is credited against the power you use at the full retail rate and rolls forward month to month (Con Edison distributed-generation tariffs, as of 2026). New York’s other option, the VDER Value Stack, pays monetary credits built from wholesale energy value rather than the retail rate; it is aimed at larger projects and for a typical home usually totals less than full retail, and the switch tends to be one-way (NYSERDA Value of Distributed Energy Resources, as of 2026). Because New York power averages about 28.55 cents per kWh (EIA, as of March 2026), each kilowatt-hour you offset is worth a lot. For the plain-English mechanics, see how net metering credits your solar exports.
Note: net metering carries a small monthly charge. Any residential system interconnected on or after January 1, 2022 pays a Customer Benefit Contribution (CBC), a monthly per-kilowatt charge set by each utility and reset every year. It does not change the 1-for-1 netting; it is a separate line item that slightly trims the savings, roughly $80 to $140 a year on a 7 kW system depending on your utility (NYSERDA 2026 CBC rates, as of 2026). The NY-Sun upfront rebate is a separate, non-tax program; its standard residential block is closed in Con Edison and Long Island territory, so see the New York solar hub for its current status.
How you pay decides which tax benefits are yours
Ownership decides who claims the credit and the abatement. If you want the 25 percent state credit and the NYC abatement in your own name, you own the system through a cash purchase or a solar loan. A lease or PPA can mean no up-front cost for eligible homeowners, but it is a long-term agreement with monthly payments, not free solar, and on those plans the third-party owner keeps most of the tax benefits, though New York’s 25 percent state credit can still reach a lease or 10-year-plus PPA customer based on their qualified payments.
| Path | Up-front cost | Who claims the 25% state credit + NYC abatement | Best when |
|---|---|---|---|
| Cash purchase | Full system cost | You, the owner | You want the fastest payback and the most lifetime value |
| Solar loan | Little to none, financed | You, the owner | You want ownership without paying cash up front |
| Lease or PPA (10+ years) | $0-up-front where eligible | The third-party owner keeps most benefits; you may still claim the state 25% credit on your payments | You prefer no up-front cost and a simpler, fixed monthly bill |
To weigh the long-run numbers, compare New York’s picture with the neighboring state’s guide, our explainer on the New Jersey state solar tax credit in 2026.
Solar tax credits by New York City borough and beyond
The state credit, RPTL 487 exemption, and sales-tax exemption apply the same across New York, while the New York City property-tax abatement applies only inside the five boroughs and Westchester homes claim the state benefits without the city abatement. For the local picture where you live, see our guides for Manhattan, Queens, Staten Island, and Yonkers.
How to choose a New York solar installer
New York has a deep, competitive installer market, which is good for you because it means real competition on price and service. Rather than chasing a “best installer” list, screen any company against objective criteria:
- A valid New York Home Improvement Contractor license, which in New York City is issued by the Department of Consumer and Worker Protection.
- NABCEP certification, the industry’s professional standard for PV installers.
- A clear workmanship and equipment warranty in writing.
- Real experience with Form IT-255, the NYC PTA-4 abatement filing, and Con Edison or your utility’s net-metering interconnection, so your paperwork and incentive enrollment go smoothly.
- A written production estimate and a transparent quote that does not count the federal credit that ended after December 31, 2025. For a checklist, see how we screen and match installers.
MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes side by side, with no obligation. See how we source our data.
Check which New York solar programs are available at your address →
Frequently asked questions
Does New York have a solar tax credit in 2026? Yes. New York’s Solar Energy System Equipment Credit is worth 25 percent of your qualified system cost, capped at $5,000, and it is unchanged for 2026 (NY Dept. of Taxation and Finance, as of 2026). You claim it on Form IT-255, and if the credit is bigger than your state tax bill you can carry the balance forward for up to five years. New York is unusual in that you can claim it whether you buy the system, lease it, or sign a power purchase agreement of at least 10 years. This is a New York State credit that stands entirely apart from the federal credit, which ended after December 31, 2025. New York’s own credit was not affected and stays fully in place for 2026.
Is the 30 percent federal solar tax credit going away in 2026? It is already gone. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act, so a New York homeowner who buys solar in 2026 cannot claim it (IRS, as of January 1, 2026). Some New York installer pages still say the credit runs through 2032; that is out of date. The credit was not reduced for 2026, it ended, so plan your project around New York’s own programs, which were not touched. A separate commercial credit, Section 48E, is claimed by the business that owns a leased system, not by the homeowner.
How do I claim the New York solar tax credit? You claim the New York State Solar Energy System Equipment Credit on Form IT-255, filed with your New York State personal income tax return for the year your system is placed in service (Form IT-255 instructions, as of 2026). The credit equals 25 percent of your qualified expenditure up to the $5,000 cap. If you lease or sign a 10-year-plus PPA, you base the credit on your qualified payments rather than the full system price. Keep your contract and proof of the placed-in-service date, and ask a tax professional to confirm how the credit applies to your return.
Does the New York solar tax credit expire? No. Unlike the federal credit that ended after 2025, New York’s 25 percent state credit has no scheduled sunset and remains in place for 2026 (NY Dept. of Taxation and Finance, as of 2026). A bill in the State Legislature (S1385) has proposed raising the $5,000 cap, but it is not law as of 2026, so budget around the current $5,000 cap and treat any larger figure as speculation (NY State Senate, S1385, as of 2026). Confirm the current cap on the Department of Taxation and Finance page before you file.
What is the New York City solar property-tax abatement? It is a New York City program that reduces your city property tax after you install solar. The abatement is worth 7.5 percent of your eligible installation cost per year for four years, or 30 percent in total, for a system placed in service before January 1, 2035 (NYC Department of Finance, as of 2026). Each year is capped at the lesser of that percentage, your building’s annual tax, or $62,500, with a $250,000 four-year cap per building. It applies to New York City Tax Class 1, 2, and 4 property and is filed through the city’s DOB NOW system. It is separate from the statewide RPTL 487 exemption, so confirm with the Department of Finance which applies to you.
Do I pay sales tax or higher property tax on solar in New York? No on both, in most places. Residential solar equipment and installation are 100 percent exempt from New York’s 4 percent state sales tax (NY Tax sales-tax bulletin, as of 2026), and New York City also exempts residential solar from its local sales tax, though a handful of upstate cities still apply their local rate. Separately, under RPTL Section 487, the value your panels add to your home is exempt from property tax for 15 years, unless your city, town, or county is one of the few that opted out (NY Senate, RPT 487, as of 2026). Confirm your locality participates before you count on the exemption.
Can I get solar in New York with no up-front cost? Some homeowners can, through a lease or power purchase agreement (PPA) where eligible, which can mean no out-of-pocket cost at installation in exchange for monthly payments. This is not free solar; it is a long-term agreement, often 20 to 25 years, and total payments may exceed the cost of a cash purchase. On a lease or PPA the third-party owner keeps most of the tax benefits, though New York does let a lease or 10-year-plus PPA customer claim the 25 percent state credit on their qualified payments. If you want the state credit and the New York City abatement in your own name, owning the system through cash or a solar loan keeps them with you. Check what you qualify for before deciding.
Reviewed by the MySolarFY Editor (reviewed July 2026). Figures were verified against the linked IRS, New York State Department of Taxation and Finance, NYC Department of Buildings, NYSERDA, New York Senate (RPTL 487), DSIRE, and EIA sources as of July 2026; the state credit terms, the NYC property-tax abatement rate and sunset, net-metering terms, and the property-tax exemption can change, so confirm current terms with the New York State Department of Taxation and Finance, the NYC Department of Buildings, NYSERDA, and your utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about how MySolarFY works.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, tax advisor, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase; on a lease or PPA the tax benefits generally go to the company that owns the system, not the homeowner. Homeowners do not get the federal residential credit (Section 25D) that ended after December 31, 2025. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
