Are There Still Solar Incentives Available In 2026?

January 7, 2026

What New York Homeowners Need to Know About Solar Incentives, Tax Credits, Rebates, Net Metering & More

Quick navigation: All Solar Incentives in New York 2026

Last year marked a major transition in the solar industry. Several long-standing incentives that New York homeowners relied on were phased out, triggering a rush of installations as people tried to lock them in before the deadline.

This scramble left many homeowners confused about what incentives and programs still exist in 2026 and whether solar still makes sense.

Short answer: Yes, solar incentives are still available in 2026. But the way homeowners access incentives now looks very different than it did only a year ago.

This guide breaks down:

What incentives still exist in 2026
What’s changed for 2026, and why that matters
How homeowners can still maximize upfront savings today
Key programs in New York (state and federal)

If you are considering solar as a standalone upgrade or pairing solar with battery storage, understanding how these new incentives work can drastically impact your overall savings when going solar in 2026.

Federal Solar Tax Credit – What Changed in 2026

For over two decades, homeowners relied on the federal solar tax credit to reduce the cost of installing solar. Under the old structure, homeowners could claim a 30% credit directly on their personal tax return under Section 25D of the tax code.

But this credit only applied to homeowners with enough federal income tax liability, which inadvertently turned away people who could benefit most.

Beginning in 2026, residential solar projects now fall under Section 48E. This credit can now only be claimed by a third-party commercial entity and not by the homeowner directly. This change created much confusion, but it also opened the door to new payment structures that work better for most homeowners.

Old model: Homeowner claims 30% credit on federal tax return
New model: Residential solar falls under Section 48E → only claimable by a third-party entity, not directly by homeowners.

Instead of requiring homeowners to have enough tax liability to use the credit themselves, the credit is automatically applied to the project cost, providing homeowners with an upfront 30% discount towards their solar upgrade instead of being refunded to them the following year.

Why this matters:

Homeowners no longer need to have enough federal tax liability to benefit.
The 30% value is now captured upfront through new project payment structures.
This reduces financing barriers for lower-income or middle-income families.

This shift removed one of the biggest obstacles homeowners faced when going solar, especially families who did not earn enough in previous years to fully use the tax credit on their own.

How A Prepaid Lease Creates Upfront Savings Without Losing Ownership

New tax rules mean select solar installers can offer a prepaid lease structure that transfers full ownership to the homeowner.

How It Works

During the initial term, the system is owned by a third-party entity that claims the federal tax credit under Section 48E. That credit reduces the total project cost by 30% immediately, not years later.

The homeowner is then taking out a loan to cover the remaining amount after that 30% discount. At year 6, ownership of the system can transfer to the homeowner at no incremental cost.

From that point forward, the homeowner owns the system outright and receives the same long-term financial benefits as a traditional purchase, without needing to qualify for complicated tax credits.

This structure allows homeowners to access the same economics of ownership while dramatically reducing the upfront barrier.

New York State Solar Tax Credit

New York State continues to offer one of the most valuable state solar incentives in the U.S. Homeowners can still claim the New York State Solar Energy System Equipment Credit. This credit is worth 25% of the system cost (capped at $5,000 per residence).

Unlike other incentives, this credit still applies even when the system isn’t owned outright. It can also be carried forward if the homeowner does not have enough tax liability in a single year to use the full amount.

Key Details

Credit: 25% of system cost
Cap: $5,000 per residence
Applies even if you don’t own the system outright
Can be carried forward if your tax liability isn’t high enough in one year

Many homeowners will choose to keep this credit when they receive it and apply it toward several years of solar payments. Others apply it directly to reduce their overall project cost even further. Either way, New York’s solar tax credit is still available and continues to lower the cost of going solar in 2026 and beyond.

Battery Storage Incentives Through NYSERDA

NYSERDA offers an Energy Storage Incentive that is currently limited by the amount set aside to fund the rebate. Right now, about ⅓ of this rebate block has been claimed by early adopters. The rebate is determined by the battery’s usable capacity, with incentive amounts that can reach over $6,000 per household.

For qualifying households, this incentive is extremely impactful. This incentive applies only to battery storage and does not reduce the solar portion of the system. However, it can dramatically improve the affordability of adding backup power.

IMPORTANT: The Federal Tax Credit Also Applies to Batteries

In addition to state incentives, battery storage also qualifies for the federal tax credit when installed with solar. When combined with the Federal Tax Credit, this incentive brings the cost of installing a battery down to a fraction of the cost to install a gas-powered generator with the same capacity.

NYSERDA Low-Income Solar Rebate (NY-Sun LMI Adder)

In addition to the State Tax Credit, NYSERDA is still offering an incentive for homeowners who meet their low-income guidelines. This rebate is part of the NY-Sun program and is completely separate from any battery or energy storage rebate.

How It Works

Eligibility based on household income and household size (county-specific)
Doesn’t depend on tax liability
Applied upfront, before financing

Eligibility is based on two things: household income and the number of people living in the home. NYSERDA publishes county-specific income thresholds, and qualification is determined at the time of application. This is not a tax credit and does not depend on tax liability.

For homeowners who qualify, NYSERDA provides an upfront solar rebate of $0.80 per watt, which is the same as $800 per kilowatt of installed solar capacity. This rebate is capped at $20,000 per home, regardless of system size beyond that point.

That means a qualifying homeowner installing a 10 kW solar system could receive an $8,000 reduction to the project immediately. A larger 25 kW system would hit the full $20,000 cap, dramatically reducing the upfront cost before financing or payments are even considered.

This rebate is applied directly to the solar portion of the project and is deducted before financing begins. Homeowners do not need to wait for a refund, file additional paperwork, or carry unused credits forward. The savings are built into the project from day one.

The NY-Sun low-income solar rebate is often the single biggest factor in making solar an obvious financial decision. When combined with New York’s $5,000 state tax credit and net metering, it allows families to lock in long-term energy savings at a fraction of the normal cost.

Net Metering Is Still In Place

Net Metering remains one of the cornerstones of going solar in New York.

How It Works

Excess solar production gets sent to the grid
Utility credits you 1:1 for each kWh exported
Credits roll forward month to month
Used when production is lower (night/winter)

When your solar panels produce more electricity than your home uses, that excess energy is sent back to the grid. Your utility company puts a new, bi-directional meter on your home which logs your system’s overproduction and they issue you a 1:1 credit for every kWh you overproduce. Every month they will provide you with a statement which shows how many credits you accumulated with them.

Those credits roll forward and are used when your system produces less energy, such as at night or during winter months. This system allows homeowners to balance production and usage across the entire year.

Net metering is designed to make sure that solar works year-round in New York and plays a major role in keeping monthly energy costs predictable. Even parts of Western New York, with brutal and long winters, can still benefit from solar power thanks to Net Metering.

Property Tax Protections Still Apply

Installing solar has been proven to increase the value of your home, but New York State continues to protect homeowners who install solar panels from higher property taxes.

Solar installations remain exempt from property tax assessments for a period of 15 years in most municipalities. That means your home can be worth more without increasing your annual tax bill.

This exemption applies regardless of how the system is financed or structured, as long as it meets state requirements. It is an often overlooked benefit, but this incentive is an important one that protects long-term savings.

Next Steps: Which Incentives You Qualify For

The incentives for going solar have changed, but they haven’t gone away.

The federal tax credit is still very much available, it’s just accessed differently. New York State incentives remain some of the best in the county and battery rebates are better than ever.

What’s become most important as a result of all these changes is the need for proper guidance.

Understanding the way incentives are structured and applied matters more now than ever. And working with an installer who understands these nuances is the difference between leaving money on the table and maximizing every available benefit.

Solar incentives are constantly changing, and over time, the value of those incentives tends to drop. For example, at one point the old NYSERDA solar rebate was nearly 10x higher than it was right before it was phased out. The best time to go solar was then, but the second best time to go solar is now.

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