What is a tax credit?
A tax credit is a dollar-for-dollar reduction in the amount of income tax you owe. For example, a $1,000 federal tax credit reduces your tax bill by $1,000. The federal solar tax credit is also known as the Investment Tax Credit (ITC). It’s different from the ITC available to businesses.
Note: The Federal Residential Solar Tax Credit (Section 25D) officially ended on December 31, 2025 as a result of the One Big Beautiful Bill. Homeowners who purchased and installed their system before that date may still claim the credit on their 2025 tax return.
What is the New York State Solar Tax Credit?
New York State offers a credit of 25% of your system cost, up to $5,000.
Who qualifies for the NY State Tax Credit?
- System installed between Jan 1, 2017 and Dec 31, 2034.
- Installed at a U.S. residence you own.
- New, first-time installation.
How do I claim the NY State Tax Credit?
- Use Form IT-255.
- Attach proof of installation.
- File with your NY State return by the deadline.
What is the NYC Property Tax Abatement for solar?
The NYC Property Tax Abatement allows you to deduct 7.5% of your solar costs per year over four years (30% total). As of Sept 2023, the program has been extended through 2034.
How do I claim the NYC Property Tax Abatement?
- Submit a completed PTA4 form with your solar installation application.
- File Form RP-495 with the Department of Finance by March 15.
- Ensure all supporting documents are submitted on time.
Do solar companies place liens on your property?
No. Some companies file public notices (such as UCC or NOIEPC filings), but these are not liens — they are simply notices that the solar company owns the equipment.
Does a solar agreement affect the buyer’s mortgage?
No. Per Fannie Mae and Freddie Mac guidelines, solar PPAs and leases do not affect a buyer’s debt-to-income ratio or loan approval. Our partners’ legal departments can provide a letter confirming compliance with Fannie Mae and Freddie Mac selling guidelines. The solar bill should be treated like a utility bill — no special “solar comps” are needed for appraisal purposes.
What can I do to ensure the home sale goes smoothly?
As soon as the home seller accepts an offer, contact the solar company’s Service Transfer team so they can work with both parties to complete all agreement transfer steps. Transfers are easiest when the solar agreement is disclosed early and made a contingency of the sale.
What if the new homeowner does not pass the soft credit check?
There are usually multiple options for buyers who don’t pass the soft credit check. Have them contact the solar provider directly to discuss alternatives.
What happens if the new homeowner does not want the solar system?
One option: add the remaining system balance to your asking price. For example, a $600k home becomes $620k. Let the buyer know the system will be removed. After closing, you pay off the system and have the panels removed.
Many providers have a high transfer success rate. If you contact them early, they can help answer questions and reduce concerns. If a transfer still isn’t a fit, they’ll review other options with you.
How do I know which type of agreement the seller originally signed?
The seller can log into their online account to view the original agreement, system design and any other documents needed for the sale.
How much power does a solar energy system produce?
Production depends on panel type, number of panels, roof location, shading, and more. During your consultation, we’ll look at your annual usage and system design so you can see what your roof can realistically produce.
Clean Energy Tax Credits Made Simple
The Inflation Reduction Act (IRA) created and expanded a wide range of clean energy tax credits for homeowners, businesses, nonprofits and builders — including credits for going solar, installing batteries, building efficient homes, driving EVs and more.
During your consultation, we’ll translate all of this into plain English and focus on what applies to you — so you understand your options before you make a decision.
Ready to get clarity on your own home or project?
Let’s talk. We are solar education professionals — not salespeople.
