Top Takeaways
1-to-1 Net Metering (with a solar system size charge)
Apply for the NYS Solar & Storage Tax Credit
1-to-1 Net Metering
New York's net metering policy requires all utilities to provide 1-to-1 net metering. Net metering is when the utility subtracts or "nets" excess production with consumption in the same monthly billing cycle at the same price per kilowatt-hour ($/kWh) they charge, called the retail rate.
Each kilowatt-hour (kWh) the solar system produces will first power your home. Any excess solar energy sent to the utility grid will receive a kWh credit on your electric bill. Production and consumption will offset each other 1-to-1. Any excess kWh credits will rollover month to month until you need them in a 'NEM bank.' There is no annual true-up as credit rollover indefinitely for up to 20 years
If you choose to receive electric generation from third-party supplier, in NY, the supply charges will also be credited 1-to-1.
Contribution Benefits Charge
There's one caveat to New York being a true 1-to-1 net metering policy. For systems installed after 2021, there's a monthly charge based on your solar system size (measured in DC kW) called the Contribution Benefits Charge (CBC).
For example, an 8 kW DC system in National Grid, will pay an $11.92 per month CBC in addition to the existing Basic Service Charge ($16-$24 per month) that all consumers contribute to operate the grid.
Utility | 2025 Contribution Benefits Charge |
National Grid | $1.49 per kW DC per month |
Con Edison | $1.84 per kW DC per month |
Central Hudson | $1.72 per kW DC per month |
PSEG Long Island | $1.00 per kW DC per month |
NYSEG | $1.23 per kW DC per month |
RGE | $1.27 per kW DC per month |
Orange & Rockland | $1.46 per kW DC per month |
Time of Use Rates
For systems installed after 2021, NY customers on Time of Use (TOU) rates in all of the utilities -- except PSEG Long Island -- receive monetary credits based on the time period the credit was exported to the grid in.
For example, if the On-Peak rate is 30 cents per kWh, you should receive a 30 cent credit to be applied to other energy charges (except the CBC and Basic Service Charges). This can be favorable for those who can shift usage to off-peak times.
PSEG Long Island + TOD Rates
PSEG began switching all customers to a Time-of-Day rate in 2024. Customers can opt out of TOD including solar customers. In PSEG, "Energy credits accumulate in separate banks for each time period. For example, if you produce excess power during a peak period, those credits appear in the peak period bank."
You can then request Energy Credit Bank Transfers if your system was installed on or after January 1, 2018. Excess Credits in one time period can be applied to any other time period. However, unlike the other NY utilities this is on a kWh basis. For every On-Peak kWh credit transferred to Off-Peak, PSEG will transfer two credits per kWh. Transferring Off-Peak credits to On-Peak is allowed, however, credits will transfer at a 2:1 ratio meaning 0.5 (half) of each Off-Peak credit will apply towards On-Peak usage.
Unfortunately, you do have to complete an Excess Generation Form and request it from PSEG Long Island on a regular cadence. Learn more
NYS's Solar Tax Credit
LightReach customers with a solar lease agreement MAY BE eligible for the NYS Solar Tax Credit! Apply with your state taxes if you have tax liability.
How to apply: Eligible residents will need to file tax Form IT-255 with their personal, state income taxes in order to redeem. The system must be installed on your primary residence. Please reference the forms and instructions from the NYS Department of Taxation & Finance here, and consult a tax professional.
Tax Credit Details
Tax Credit Details
Background: The NYS Solar Tax Credit was enacted under Tax Law section 606(g-1), and does not currently have an expiration date. The legislation provides eligible solar customers credits on their personal, state income tax.
Eligibility: Residents of New York State that Purchase, Lease, or enter into a Power Purchase Agreement (PPA) for the installation of qualified solar energy system equipment on their primary residence may be eligible for the credit. Qualified solar equipment includes storage when paired with solar. Leases and PPA agreement terms must extend for at least ten years. It is important to note state tax credits can only offset existing state tax liability. Residents without taxes owed to the state may not be able to benefit. Palmetto LightReach and our Certified Installers cannot provide tax advice on specific financial circumstances and we recommend you speak to your trusted tax professional.
Tax credit value: The tax credit is worth 25% of the qualified solar energy system equipment expenditures up to a maximum of $5,000. If the customer does not have enough state tax liability to redeem the entire credit in one year, it can be carried over for up to five tax years. The total incentive value will never exceed 25% of the qualified expenditures or $5,000.
Lease Agreements: Palmetto LightReach customers with a solar lease agreement can receive a NYS Tax Credit of all payments made during the taxable year under the agreement with a total cap of 25% of qualified expenditures up to $5,000, or 15 years, whichever happens first. You may claim a tax credit based on 100% of the amount paid in each taxable year until the cap is reached. The 25% limitation only applies to the total aggregate amount of all payments to be made to the lease agreement.
For example, if your Lease payment costs are $1,000/year for a 25 year term with no price escalation, your total Qualified Expenditures would be $25,000. If in the 2025 taxable year, your Lease payments are $1,000, you would be eligible to claim $1,000 for tax year 2025. You would then be eligible to claim another $1,000 in 2026, 2027, and any subsequent year until the $5,000 limit is reached (or max 15 years).