The New York Solar Tax Credit, Explained

What the New York solar tax credit is

New York State offers a residential Solar Energy System Equipment Credit equal to 25% of qualified solar energy system equipment expenditures and limited to $5,000 (per the New York State Department of Taxation and Finance). It applies to your New York State personal income tax. It is separate from any federal residential incentive that may or may not be active at the time of your install.

This is general information, not tax advice. Your specific situation depends on your tax liability, filing status, and other factors. Talk to a tax professional before relying on any specific number.

Non-refundable, but with a five-year carryforward

The New York Solar Energy System Equipment Credit is non-refundable — it can reduce your New York State income tax to zero, but it will not generate a refund beyond that. However, any unused portion of the credit can be carried over for up to five tax years, which gives many homeowners enough time to fully use the credit.

How it stacks with federal incentives

When a federal residential solar tax credit is active, it applies to your federal return; the New York State 25% credit applies to your New York return. They are claimed separately and do not directly cancel each other out.

Federal residential incentives have changed. The IRS Residential Clean Energy Credit applied to qualified clean energy property installed from 2022 through December 31, 2025 and is not available for property placed in service after that date. The planning review verifies whichever federal program (if any) is active at the time of installation rather than assuming a federal credit on every quote.

Disclaimer

Incentives change and eligibility varies. Confirm details with the program administrator and a qualified tax professional.