Can I still get a federal tax credit for solar panels in 2026?

Not as a homeowner who buys the system. The federal residential clean energy credit under Internal Revenue Code Section 25D was terminated by the One Big Beautiful Bill Act (Public Law 119-21, section 70506) for expenditures made after December 31, 2025. There is no phase-down and no smaller successor credit for a cash or loan purchase. If a 2026 proposal shows a federal credit line on a system you will own, it is a 2025 document and the net price on it is wrong. Confirm your own return with a tax professional.

How much is the New York State solar credit and how do I claim it?

New York Tax Law section 606(g-1) gives 25% of qualified solar equipment expenditures, capped at $5,000, for a system at your principal residence in the state. You claim it on Form IT-255 with your New York return for the year the system is placed in service, and any amount larger than your tax for that year carries forward for up to five years. Because 25% of $20,000 is $5,000, any system costing more than $20,000 hits the cap.

What happens to the extra power my panels send to PSEG Long Island?

Under the net metering terms PSEG Long Island published in its Solar Power and Net Metering brochure (form FC 15014, September 2018), each excess kilowatt-hour you export earns one energy credit in an Energy Credit Bank. For residential systems installed after January 1, 2018, those credits carry forward month to month and are drawn down automatically when you use more than you make, and that arrangement was scheduled to run 20 years from the day you start net metering. Terms can change, so confirm the current rule with PSEG Long Island before signing.

Is there still a NYSERDA rebate for solar on Long Island?

For a market-rate household, no. The standard residential NY-Sun Megawatt Block incentive for the Long Island region is closed. For an income-eligible household, yes: NYSERDA's Long Island dashboard, read on October 6, 2026, lists the Affordable Solar Residential Incentive at $0.40 per watt of nameplate capacity for households at or below 80% of area or state median income. Eligibility is verified by NYSERDA, not by the installer, so check it before you sign.

Do solar panels raise my property taxes or carry sales tax in New York?

Residential solar equipment is exempt from the state portion of New York sales tax under Tax Law section 1115(ee); ask the installer to show the tax line so you can see whether any local portion was charged. On property tax, Real Property Tax Law section 487 exempts the value solar adds to your home for 15 years, but towns, counties and school districts can opt out of section 487. Ask your town assessor whether yours has before you count it.

Incentives

Long Island Solar Incentives 2026: State Credit, Net Metering, What Is Left

Huntington Solar Co Published October 6, 2026

A Long Island homeowner who buys a solar system in 2026 can still claim New York’s 25% state credit up to $5,000, can still bank exported power through PSEG Long Island net metering, and can still avoid sales tax and the added property assessment - but cannot claim any federal credit. Everything below carries the authority it comes from and the date it was true, because the single most expensive mistake in a 2026 solar quote is a number that was correct a year ago.

That is not a rhetorical point. The federal credit that used to cover 30% of the cost ended on December 31, 2025, and plenty of proposals handed across Suffolk County kitchen tables this year still carry it. Here is the full list of what ended, what remains, and the order to claim it in.

What ended, and on what date

The federal residential clean energy credit (IRC Section 25D) returned 30% of a residential solar purchase as a federal income tax credit through 2025. Section 70506 of the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) terminated it for expenditures made after December 31, 2025. Before that law it was scheduled to run through 2034 with a step-down; it now simply stops.

What that means for your quote:

A system you buy with cash or a loan in 2026 earns no federal credit. The federal line on the proposal should read zero.
An expenditure is generally treated as made when installation is complete, so a contract signed in 2025 for a system finished in 2026 does not rescue the credit. If you are in that situation, take it to a tax preparer, not to the salesperson.
A lease or power purchase agreement (PPA) is a different case. The company that owns the panels may claim a commercial credit under a separate section of the tax code and can price some of that into your rate. You claim nothing yourself, and nothing obliges the owner to pass any of it through. Our loan vs lease vs PPA comparison runs the 20-year numbers.

If a 2026 proposal for a system you will own shows a federal tax credit, the net price on that page is wrong by about 30% of the system cost.

The standard-income NY-Sun rebate on Long Island is also gone. NYSERDA’s NY-Sun program paid a per-watt incentive through the installer in declining Megawatt Blocks, and the residential blocks for the Long Island region have closed. A market-rate household should see no NY-Sun line on a quote. If one appears, ask which block it draws from and check it on NYSERDA’s Long Island dashboard yourself.

What New York still pays

The state solar equipment credit - Tax Law 606(g-1)

This is the largest incentive left and it is unchanged:

Amount: 25% of qualified solar energy system equipment expenditures
Cap: $5,000
Eligibility: equipment installed at your principal residence in New York State
How to claim: Form IT-255, filed with your New York income tax return for the year the system is placed in service
If your tax is smaller than the credit: the unused amount carries forward for up to five years

The cap does most of the work. Since 25% of $20,000 is $5,000, any system that costs more than $20,000 gets the full $5,000 and no more. For most full-size Long Island arrays, think of the state credit as a flat $5,000 against New York State income tax, not as a percentage. It is a credit against tax owed, not a check in the mail, so a household with little New York tax liability collects it over several years rather than at once.

The sales tax exemption - Tax Law 1115(ee)

Residential solar energy system equipment is exempt from the state portion of New York sales and use tax. Ask the installer to show the tax line on the final invoice. If a local portion has been charged, ask why in writing.

The property tax exemption - RPTL Section 487

New York Real Property Tax Law section 487 exempts the increase in assessed value that solar adds to a home, for 15 years. In plain terms: the array should not raise your assessment. The catch is that a town, county or school district can opt out of section 487, and a few in New York have. Before you count this in your math, call your town assessor and ask whether your town and your school district honor it, and whether a filing is needed (the application is usually Form RP-487).

NY-Sun for income-eligible households

The rebate is not gone for everyone. As read from NYSERDA’s Long Island dashboard on October 6, 2026, the Affordable Solar Residential Incentive pays $0.40 per watt of nameplate capacity in the Long Island region for households at or below 80% of area or state median income. NYSERDA verifies income and requires the project to meet the rest of the NY-Sun program rules. If your household may qualify, start with NYSERDA before you start with any installer.

How PSEG Long Island net metering works now

Net metering is not a rebate and it does not show up as a single dollar figure, but on Long Island it is where most of the value of a solar system comes from. The source here is PSEG Long Island’s own Solar Power and Net Metering brochure (form FC 15014, dated September 2018), which describes the program PSEG administers on behalf of the Long Island Power Authority. Long Island sits outside the state Public Service Commission’s VDER framework; LIPA sets its own rules.

Per that brochure:

A net meter is installed that runs forward when you draw power and backward when you export it.
Each excess kilowatt-hour earns one energy credit, banked in an Energy Credit Bank shown on your bill.
For residential systems installed after January 1, 2018, credits carry forward month to month through the year and are drawn down automatically in months when you use more than you generate. As of 2018 this was scheduled to remain in effect for 20 years from when you start net metering.
For systems installed before January 1, 2018, credits run on a 12-month contract year. At the annual reconciliation date, leftover credits are converted to money at the SC-11 buy-back rate - the wholesale cost of power - and the bank resets to zero.
On a time-of-use rate, each period has its own credit bank, and peak and off-peak credits cannot be combined.
You still get a bill every month, because the daily service charge for your grid connection applies whether or not you exported power.

The brochure itself says the terms are “subject to change without notice, including early termination,” and it is eight years old. Before you sign, ask PSEG Long Island (Energy Efficiency Infoline, 1-800-692-2626) which net metering terms a residential system interconnected today is approved under, and ask your installer to show that answer in writing alongside their savings estimate. Do not let a proposal assume a compensation method nobody has confirmed.

What this does to sizing: because credits bank kilowatt-hour for kilowatt-hour, an array sized to your own annual usage captures the most value. Our read-your-PSEG-bill guide shows where to find twelve months of usage, which is the only sound starting point for system size.

The order to claim it in

For a homeowner buying in 2026, the sequence is:

Before signing: if you may be income-eligible, check NY-Sun Affordable Solar with NYSERDA first. Confirm net metering terms with PSEG Long Island. Call the assessor about section 487.
At contract: confirm the quote shows zero federal credit, no NY-Sun line unless you are income-qualified, and no state sales tax on the equipment.
At installation: your installer files the PSEG Long Island interconnection application; PSEG installs the net meter; the installer sends closeout documents; PSEG issues a Commercial Operations (COD) letter, which is your permission to operate. The install process page lays out that sequence.
At tax time: file IT-255 with your New York return for the year the system was placed in service, using the installer’s final cost letter.
Within your town’s deadline: file for the section 487 exemption if your town requires it.

The math, without a payback promise

Here is a worked example that uses only the statutory numbers above. Take a system with a gross contract price of $24,000:

Item	Authority	Amount
Gross price	your contract	$24,000
Federal credit	IRC 25D, ended 12/31/2025	$0
NY State credit	Tax Law 606(g-1), 25% to $5,000	-$5,000
NY-Sun (market-rate)	NYSERDA, Long Island block closed	$0
Net cost to you		$19,000

An income-eligible household adds the Affordable Solar incentive at $0.40/W per NYSERDA’s dashboard as of October 6, 2026 - $3,200 on an 8 kW system - typically taken off the price by the installer.

What this table does not tell you is how many years the savings take to cover the $19,000. That depends on your own usage, your own rate class, how well the system matches your usage, and what PSEG Long Island rates do over the next decade - none of which anyone can promise. A real estimate starts from your last 12 bills. Anyone quoting a payback period without asking for them is guessing. The full incentives breakdown is kept current as programs change.

Where this leaves a north-shore homeowner

For a Huntington, Northport or Dix Hills household, the 2026 picture is narrower but clear: $5,000 from New York, kilowatt-hour banking from PSEG Long Island, no sales tax on the state portion, no added assessment where section 487 applies, and NY-Sun money only for households under the income line. The federal 30% is gone, and any quote that still counts it should be set aside.

If you want those numbers run against your own PSEG Long Island usage rather than an example, request a free quote through residential solar installation - and ask for every incentive line to name its source, the way this page does.

Frequently asked

Can I still get a federal tax credit for solar panels in 2026?: Not as a homeowner who buys the system. The federal residential clean energy credit under Internal Revenue Code Section 25D was terminated by the One Big Beautiful Bill Act (Public Law 119-21, section 70506) for expenditures made after December 31, 2025. There is no phase-down and no smaller successor credit for a cash or loan purchase. If a 2026 proposal shows a federal credit line on a system you will own, it is a 2025 document and the net price on it is wrong. Confirm your own return with a tax professional.
How much is the New York State solar credit and how do I claim it?: New York Tax Law section 606(g-1) gives 25% of qualified solar equipment expenditures, capped at $5,000, for a system at your principal residence in the state. You claim it on Form IT-255 with your New York return for the year the system is placed in service, and any amount larger than your tax for that year carries forward for up to five years. Because 25% of $20,000 is $5,000, any system costing more than $20,000 hits the cap.
What happens to the extra power my panels send to PSEG Long Island?: Under the net metering terms PSEG Long Island published in its Solar Power and Net Metering brochure (form FC 15014, September 2018), each excess kilowatt-hour you export earns one energy credit in an Energy Credit Bank. For residential systems installed after January 1, 2018, those credits carry forward month to month and are drawn down automatically when you use more than you make, and that arrangement was scheduled to run 20 years from the day you start net metering. Terms can change, so confirm the current rule with PSEG Long Island before signing.
Is there still a NYSERDA rebate for solar on Long Island?: For a market-rate household, no. The standard residential NY-Sun Megawatt Block incentive for the Long Island region is closed. For an income-eligible household, yes: NYSERDA's Long Island dashboard, read on October 6, 2026, lists the Affordable Solar Residential Incentive at $0.40 per watt of nameplate capacity for households at or below 80% of area or state median income. Eligibility is verified by NYSERDA, not by the installer, so check it before you sign.
Do solar panels raise my property taxes or carry sales tax in New York?: Residential solar equipment is exempt from the state portion of New York sales tax under Tax Law section 1115(ee); ask the installer to show the tax line so you can see whether any local portion was charged. On property tax, Real Property Tax Law section 487 exempts the value solar adds to your home for 15 years, but towns, counties and school districts can opt out of section 487. Ask your town assessor whether yours has before you count it.