Why You Can Trust CNET How Solar Can Help New Yorkers Control Rising Energy Costs
Want to save money on your energy costs? Discover the solar alternatives available in New York.
Utility bills can be expensive in New York. Solar panels might be a solution.
New York residents are paying some of the highest electricity rates in years due to fuel shortages and limited availability of gas pipelines. Solar panels could be a viable energy alternative.
Two major investor-owned utilities servicing New York, National Grid and Consolidated Edison, planned for a 22% increase in energy rates in the state last fall. Recently, Consolidated Edison unveiled a proposal to raise electricity rates by 4.2% this year, 4% in 2024 and 3.8% in 2025, which received approval from the state's Public Service Commission, a utility regulator.
Going solar could help you cut your energy bills and lock you in a more stable price for years. Some people with solar panels can significantly reduce their utility bills or even eliminate them.
New York has seen exponential growth in solar installations since 2012. According to the Solar Energy Industries Association, New York ranks ninth in the nation in total installed solar capacity. About 4% of the state's electricity comes from solar, which can power more than 600,000 homes. With federal and state benefits, New Yorkers have incentives to go solar.
Here's what you should know if you are thinking about investing in solar panels in New York.
New York solar panel costs
There is no uniform cost for solar panels. What you will pay for a solar system in one state would be different in another one due to contractor availability and varying soft costs, like sales tax, marketing, permitting and interconnection as well as your energy use habits, your roof's condition and the type of solar panels you prefer. The availability of state and local incentive programs can also determine what you will pay for a solar system.
The average size of a residential solar energy system in New York is 7 kilowatts -- lower than the national average of 8 kilowatts. The table below shows the total solar panel costs and average system size in New York, based on data from Lawrence Berkeley National Laboratory's Tracking the Sun report and consulting firm Wood Mackenzie.
Average cost of solar panels
| System size (kW) | Price per watt | Installed cost | |
| New York | 8.3 | $3.80 | $31,622 |
| US | 8 | $2.99 | $23,920 |
Solar financing options in New York
New Yorkers have a few options to go solar. Each of them has its advantages and disadvantages.
Cash: Buying your solar system with cash will allow you to bypass any interest or loan fee payments and instantly begin saving on electricity costs.
Financing: A solar loan is a great option if you can't afford to buy solar panels outright. The advantage of a loan is that you don't have a substantial upfront cost and will pay your loan back each month. But various fees attached to the loan can be additional costs on top of the principal payment.
Leasing: When you lease solar panels, you enter a long-term contract with a solar company. The leasing company will install a solar system on your home, charge you a fixed monthly amount for using the electricity from the panels and retain ownership over them unless you want to buy out the system in a specified period. The company will take advantage of all the government incentives.
Power purchase agreement: Under a power purchase agreement, a solar developer installs solar panels on your property and charges you a fixed price per kilowatt-hour for the energy generated by the panels over a long term contract. Similar to leasing, the solar company owns the solar panels and receives all incentives.
Using cash to pay for solar panels requires substantial amounts upfront. But owning a solar system by buying or financing it saves you more money in the long term than leasing or power purchase agreement. The average payback period for purchased solar panels is six to 10 years. However, since solar system ownership isn't for everyone due to financial or property constraints, a power purchase agreement, leasing or enrolling in a community solar program are other alternatives for those wanting to go solar. You can find a community solar program in your area by using the search tool provided by the New York State Energy Research and Development Authority.
New York solar panel incentives and rebates
While the cost of solar panels has come down by 64% over the last decade, they are still an expensive investment for most people. As a New York resident, you can use federal and state incentives to lower the cost of solar panels.
New York solar incentives
| Program | Description |
|---|---|
| Net metering | Net metering lets you send your extra solar generation back to the grid and receive credits on your electric bills. Under New York's modified 2020 net metering policy, if you plan to install solar panels in your home, you can receive a full retail rate for every kilowatt-hour of electricity you send to the grid. However, you must pay a monthly customer benefit contribution charge, which is based on your solar system's capacity and varies by utility. The charge can range from $0.69 to $1.09 per kilowatt per month. This supports state-funded projects. |
| New York solar tax credit | If you buy a solar system for your home, you can deduct 25%, up to $5,000, of its cost from your state income taxes. Any extra credit from a given tax year can roll over for up to five years. |
| New York-Sun megawatt block program | You can receive compensation for each kW of installed solar capacity in your home. The incentive rate depends on your utility and region of New York. A Megawatt Block program can fill up by the amount of solar power generated in a particular geographic region. Once the program fills up, it stops providing the benefits. Check if your utility and geographic area's Megawatt Block is still available to solar customers. |
| Solar sales tax exemption | Buying your residential solar system in New York can qualify you for a 100% solar sales tax exemption. You can claim the tax exemption when filing your state tax returns. |
| Federal tax credit | The residential clean energy credit, a solar tax credit program, is a federal solar incentive that lowers your federal tax burden by allowing you to claim 30% of the cost of a solar system on your taxes. The 30% credit is valid between 2022 and 2032. After that, it will fall to 26% in 2033 and 22% in 2034, ending in 2035 unless extended. |
New York solar companies
According to the Solar Energy Industries Association, 758 solar companies operate in New York, including 156 solar installers. Here are some of the top solar companies you may want to consider if you decide to go solar, including some from CNET's picks of top national installers.
Momentum Solar
Momentum Solar serves 11 states, including New York. The company works with its customers from beginning to end, including the sale, design, permitting, installation and interconnection of solar systems. Momentum Solar installs solar batteries only in five states, including New York. The company provides a 25-year quality of work and a 25-year product warranty. Momentum Solar customers can buy or finance solar panels or sign a lease or a power purchase agreement.
Palmetto Solar
Palmetto Solar is a national solar panel and battery installer serving 24 states and Washington, D.C. The company offers a 25-year performance and quality of work warranty. Like most national solar companies, Palmetto provides various financing options, including solar loans, power purchase agreements or leases.
Solanta
Solanta installs solar panels, batteries and EV chargers for residential customers. As a New York-based solar company, it can help you navigate local permitting requirements, apply for state incentives and receive customized expertise for your home. The company offers financing and leasing options to customers. Solanta gives you a 10-year quality of work warranty -- lower than competitor warranties.
SUNation Energy
SUNation Energy is a New-York based installer of solar panels, batteries and EV chargers. The company also offers post-installation energy monitoring services, annual inspections, solar pest guards and solar snow guards. According to SUNation Energy, it doesn't outsource its installation work or charge hidden fees for its customers. SUNation Energy provides a 25-year product and quality of work warranties. It offers financing options through several banks and credit unions. However, it's unclear if it offers leasing or power purchase agreement options.
SunPower Solar
SunPower is one of the nation's largest solar installers. The company provides a 25-year product, performance and quality of work warranties. SunPower allows you to buy a solar system outright, finance it or enter a solar lease or power purchase agreement. The company's financing branch SunPower Financial provides loans to underserved communities at affordable rates.
Important installation factors
While solar panels can be an attractive investment, especially with rising electricity costs, it's worth mulling over various factors to determine if solar is the right choice for you.
- Roof condition and pitch: Your roof's pitch can make a solar investment easier or harder. Determine whether your roof has the correct pitch to produce enough solar energy. According to the US Department of Energy's estimates, a 15- to 40-degree angle is optimal for solar panel efficiency. Speak with a professional solar installer to determine whether your roof has enough space for solar panels or if it needs to be repaired or replaced before attaching panels.
- Insurance coverage: Including your solar system in your homeowner's insurance policy can give you peace of mind. It has added protection in case of an unforeseen natural disaster. Ask your insurance company if your policy will cover the solar system and add it to the insurance once the installation is complete.
- Investment vs. time: Most solar projects make sense as long-term commitments. If you think about selling your house in a couple of years, tying yourself to an expensive investment before it pays itself off may not be prudent.
- Renting vs. owning your home: If you rent your home, you must get permission to install solar panels on your rooftop. Investing in solar panels in a rented house may not make sense since you don't own it and may need to move in a few years. The best way for renters to go solar is to join a community solar program.
New York solar FAQs
How can I find a solar installer in New York?
Finding the right installer from dozens of solar installers in New York can be overwhelming. To start your search, look through the profiles of several solar companies operating in New York, go over customer reviews, search for any lawsuits filed against the companies, get multiple quotes from various installers and choose an installer with at least three years of experience and the necessary licenses. CNET's pick of the top solar companies can be a helpful resource to narrow down your choices.
Should I fix or replace my roof before installing solar panels?
Solar panels are designed to last for at least 25 years. Your roof must be able to support your solar panels for that long. Consult with a reputable professional about your roof's condition before installing solar panels.
What should I do if my solar system has problems?
If you need help with your solar system, contact your installer. Improper installation can be one of the problems. Only your installer can help you determine that. Many solar systems have an online monitoring program to track their production data. Your installer can diagnose a problem by looking at the monitoring data and finding the best way to address the issue. If an installer needs to come to fix the problem in person, it's important to check if the labor warranty will cover the cost.