New York Solar Incentives 2026: Tax Credit, NY-Sun, NYC Abatement

New York solar incentives in 2026: a 25% state income tax credit (up to $5,000 — available on leases and PPAs too), the NYC property tax abatement (30% of system cost over four years, five boroughs only), and full-retail net metering. The standard NY-Sun rebate is closed in every region; only the income-eligible Affordable Solar incentive ($0.80/W Con Edison and Upstate, $0.40/W Long Island) remains.

New York is one of the few states where owned and leased solar both still get a meaningful tax credit after the federal residential credit ended. It is also one of the states where we most often see out-of-date proposals: NY-Sun rebate lines that no longer exist, a 30% federal credit that ended for every homeowner-owned system on December 31, 2025, and a monthly utility charge on solar customers — the Customer Benefit Contribution — that almost never appears in the savings math.

New York solar incentives 2026 at a glance

Is there a New York State solar tax credit in 2026?

Yes. The New York State Solar Energy System Equipment Credit (Tax Law §606(g-1), claimed on Form IT-255) is 25% of your qualified solar expenditures, capped at $5,000, for a system installed and used at your principal residence in New York. It is a state income tax credit, completely separate from the federal credit, and nothing in the 2025 federal tax law changed it.

Details that matter, straight from the 2025 Form IT-255 instructions:

• Qualified expenditures on a purchase include materials, installation labor, engineering, and design — but not interest or finance charges, and not any portion paid with a non-taxable grant.
• Principal residence only. A vacation or second home does not qualify. A house, condo, co-op, or mobile home does, owned or rented.
• Net metering required. For a system that produces electricity, you must be on a net-metering contract (or the utility's net-metering schedule) and interconnected before you can claim it.
• Non-refundable, with a five-year carryforward. The credit reduces the New York tax you owe; if it's more than your tax in the year you claim it, the unused portion carries forward up to five years, then expires. If your NY tax bill is small, you may never collect the full $5,000 — check this before a proposal counts it as cash in hand.

Does the NY solar tax credit apply to a lease or PPA?

Yes — and this is the part most homeowners don't know. Unlike the old federal credit, New York's credit is available to homeowners who don't own the system, as long as the lease or power purchase agreement is a written contract of at least 10 years. The mechanics differ by structure:

A worked example: a $150/month PPA is $1,800 a year in payments. At 25% that's $450 of state credit per year, so it takes about 11 years to reach the $5,000 cap. A $30,000 cash purchase hits the cap in year one (25% × $30,000 = $7,500, limited to $5,000). A lease works differently again: the cap is 25% of the total payments over the term (up to $5,000), but each year's credit is the full amount you paid that year — so a $150/month, 20-year lease ($36,000 total, cap $5,000) claims $1,800 in year one, $1,800 in year two, and the last $1,400 in year three. All three structures share the $5,000 ceiling; they just reach it at different speeds, and always subject to having enough New York tax liability to absorb it.

Two things this means for a New York quote. First, a lease or PPA proposal that doesn't mention the state credit is leaving your money on the table — ask. Second, a proposal that shows the credit as a year-one lump sum on a PPA is wrong; it arrives over roughly a decade (about three years on a lease).

Is the NY-Sun rebate still available in 2026?

Not for standard-income households. NY-Sun's residential "Megawatt Block" incentives — the per-watt rebate your installer applied at the point of sale — have closed in every region:

What remains is the Affordable Solar Residential Incentive: a total of $0.80 per watt in the Con Edison and Upstate regions ($0.40 per watt on Long Island) for households at or below 80% of area median income (or who qualify through certain assistance programs). On a 7 kW system that is $5,600 off the price, applied by a NY-Sun participating installer. If you might qualify, it is by far the largest single incentive on the list — ask the installer to screen you before pricing.

If you are a standard-income household and a 2026 proposal shows a "NY-Sun rebate" or "NYSERDA incentive" line, the price is built on a program that closed. Ask for it removed and the net cost recomputed. NYSERDA publishes live block dashboards per region; your installer can show you the current status.

What is the NYC solar property tax abatement?

The NYC Solar Electric Generating System Property Tax Abatement is a city-level incentive worth 7.5% of eligible system cost per year for four years — 30% total — taken off your property tax bill, for grid-connected systems placed in service from January 1, 2024 through January 1, 2035. Eligible cost excludes finance charges and any grant-funded portion (such as a NY-Sun incentive); each year's abatement is capped at $62,500 and at the property tax you actually owe that year, and anything unused does not carry over. Since 2024 the abatement also covers paired battery storage.

Practical points:

• It is filed with the NYC Department of Buildings on Form PTA4, by a registered architect or professional engineer — usually your installer's filing professional, not you.
• The application must reach DOB by March 15 for the abatement to start July 1 of that year; miss it and it starts the following July.
• It stacks with the state credit and net metering. It applies to the five boroughs only — not Westchester, not Long Island.
• A NYC proposal that omits it is under-selling the deal; one that shows it as an upfront discount is misrepresenting the timing.

How does net metering work in New York in 2026?

Residential customers of New York's investor-owned utilities and PSEG Long Island can still interconnect under Phase One net metering: exported solar is credited at the full retail rate, credits bank month to month, and the terms run for a 20-year term from interconnection. That is the single biggest reason solar still pencils in New York without the federal credit, and it is why the state credit's net-metering requirement is rarely a problem in practice.

What is the CBC charge on a New York solar bill?

The Customer Benefit Contribution (CBC) is a monthly utility charge, based on the DC size of your system, paid by every residential and non-demand small-commercial solar customer interconnected since January 1, 2022 — and most proposals leave it out. It funds the utility's public-benefit programs and is set so that your contribution to those programs is the same with or without solar. The 2026 rates for net-metered residential systems, as published by the utilities and compiled by NYSERDA:

Source: NYSERDA, "2026 Utility-Published Customer Benefit Contribution Rates" (April 2026). Rates are recalculated every year and are not locked in at interconnection.

Roughly $80–$140 a year is not a deal-breaker, but over 25 years it is $2,000–$3,500 that a "your bill goes to $0" pitch has ignored. A proposal built on the utility's actual tariff should show a small remaining monthly bill even in a full-offset scenario; if it shows zero, the CBC and the fixed customer charge were left out. Note also that the charge is per kW of system size — oversizing a system "for future use" raises the CBC every month whether or not you use the power.

Customers can alternatively opt into the Value Stack (VDER) tariff, which carries a lower CBC but credits exports at a calculated value rather than the retail rate; for a typical home, net metering is almost always the better choice, and Long Island mass-market customers cannot opt into VDER at all.

What happened to the federal solar tax credit in New York?

The 30% federal residential credit (§25D) is not available for systems whose installation was completed after December 31, 2025 — for every homeowner-owned system, however you pay for it. If your installation was completed in 2025 and the credit was larger than your tax bill, the unused amount still carries forward under §25D(c); ask your CPA. A 2026 New York proposal for a system you will own that still shows it is wrong — see why that's a red flag. Third-party owners (lease and PPA providers) may still be able to claim the commercial §48E credit if the project meets the post-2025 construction-start / placed-in-service deadlines and foreign-entity rules — and whether that credit is even available on a residential roof is unresolved, so treat it as the provider's problem, not a settled benefit. Whatever they qualify for never lands on your return: it can only reach you through the monthly payment you are quoted, which is a price the provider sets, and whether it stays a saving depends on the escalator over the term.

This is why New York's structure is unusual in 2026: on a lease or PPA, the provider may get a federal credit and you get the state credit. Make sure the proposal doesn't quietly assume the provider gets both.

Before you sign: 5 incentive lines to check in a New York solar quote

1. State credit: is it there, is it 25% capped at $5,000, and is the timing right (year one for cash/loan, about three years on a lease, about a decade on a PPA)? Does your New York tax liability actually support it?
2. NY-Sun: if you are standard-income, there should be no rebate line. If you may be income-eligible, there should be an Affordable Solar line ($0.80/W, or $0.40/W on Long Island) and a screening step.
3. NYC abatement: present if the home is in the five boroughs, shown as four annual property-tax reductions, not an upfront discount.
4. Federal credit: absent on any system you will own, however you pay for it. On a lease or PPA, not shown as yours.
5. CBC + customer charge: the post-solar bill projection should not be $0. Ask for the utility's 2026 CBC rate × system kW to be shown as a monthly line.

New York solar incentives FAQ

Can I claim the NY solar credit if I rent my home?

Yes, if it is your principal residence and you paid the qualified expenditures (or the lease/PPA payments). The credit follows the taxpayer who paid, not the property deed.

I'm moving to another house in New York. Do I get the credit again?

Yes. The instructions allow a separate credit for each principal residence, filed on a separate Form IT-255, as long as you incurred the costs while it was your principal residence.

Is the state credit refundable?

No. It can only reduce New York tax you owe, with unused amounts carried forward up to five years.

Does adding a battery raise my CBC charge?

The CBC is calculated on the DC size of the solar system. Check with your utility about how paired storage is treated on your specific tariff before assuming either way.

Get your New York solar quote checked, free

If you'd rather have someone run those checks for you, send us the proposal. Solarfying is an independent solar broker: we don't install systems, homeowners pay us nothing, and we're compensated on the industry side only if you choose to move forward with a deal through us. We'll review the quote free — the incentive lines, the price per watt, the system size against your usage, and the financing — and show you whether the savings hold up on the incentives you can actually claim. You can see how the quote review works first.

This article is general consumer education, not legal, tax, or financial advice. Incentive rules, NY-Sun block status, CBC rates, and utility tariffs change; confirm current figures with the New York State Department of Taxation and Finance (Form IT-255 instructions), NYSERDA's NY-Sun dashboards, the NYC Department of Buildings, and your utility before you rely on them. Example figures are illustrative, not estimates for your home.