Despite a key federal solar tax credit expiring, residential solar continues to offer homeowners’ dependable savings. Thanks to progressive state and city policies, combined with fundamental economic benefits, solar remains the most effective financial defense for New York households.
New Yorkers will see utility rates increase in the near future due to widespread infrastructure upgrades and surging electricity demand associated with increased electrification and the buildout of cloud infrastructure. Residential electricity prices in New York City have risen nearly 26% between December 2020 and December 2025. And following the latest Public Service Commission settlement, Con Edison customers are facing a three-year ladder of approved rate hikes: roughly 3.5% in 2026, followed by another 3.2% and 3.1% through 2028. This trend is expected to accelerate; the New York Independent System Operator (NYISO) projects annual electricity usage will climb by more than 16% over the coming decade and generating capacity struggles to keep pace with skyrocketing demand, driving costs. Based on an average of a 3% rate increase per year, electricity rates are expected to rise by 30% in the next decade.
Solar is the most effective financial defensive mechanism homeowners and building owners can employ to combat rising energy costs. By generating and supplying power onsite, solar guarantees a cheap supply of electricity, reducing the amount of grid-supplied electricity needed. The cost of solar energy is determined by the cost of the system spread across the system’s guaranteed 30-year lifespan; on average, solar cost averages out to be $0.14/ kwh. This “locked-in rate” offers protection from Con Ed rate volatility, providing solar customers with predictable, reduced costs. And as rates increase, the savings potential of solar increases.
The combination of solar’s savings potential in conjunction with city and state incentives has made New York City one of the best places to go solar nationwide. At the state level, the New York State Solar Tax Credit allows homeowners to claim 25% of their solar energy system costs (up to $5,000), as a state income tax credit and an additional 20% for qualifying historic homes as part of this NY State Historic Homeownership Rehabilitation Tax Credit (HTC); and for City residents the New York City Solar Property Tax Abatement will cover up to 30% of a system’s cost over four years and has been extended through 2034.
Beyond incentives, New York’s policy landscape is strongly encouraging renewable energy expansion. Because NYC buildings are the main source of greenhouse gas emissions, the city designed a series of local laws under the Climate Mobilization Act which encourage reduced building emissions by requiring the addition of solar or greenery on rooftops (Local Laws 92 & 94), and by setting carbon caps for large buildings over 25,000 square feet (Local law 97), with associated financial penalties for buildings who fail to meet emissions benchmarks. And while these policies were set to increase electrification, they have propelled solar energy adoption across the city.
The combination of New York’s incentives, policy requirements, and surging energy demand has transformed the city into one of the most financially viable places to go solar in the nation. But regardless of these incentives, the long-term energy savings solar provides will be fundamental in ensuring energy affordability, acting as an essential hedge against energy price volatility. Electrification is coming, and solar is a crucial element of the City’s infrastructure, ensuring energy remains affordable and resilient for New York City residents. Solar can stand on its own merits, and a shift in federal subsidies should not deter anyone’s interest in taking advantage of the benefits solar provides.
T.R. Ludwig is the chief executive officer of Brooklyn SolarWorks.
