Is Solar Worth It in New York? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in New York:
- New York ranks 11th in the country for solar installations*
- The average electricity rate is 18.36 cents per kilowatt-hour (kWh)**
- The average solar payback period is 10 years***
- Homeowners are eligible for the New York Solar Tax Credit and the federal solar investment tax credit (ITC)
- The average homeowner saves $24,387 over the lifetime of their solar system***
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New York ranks 11th in the country for solar installations, and residents pay more for electricity than most homeowners throughout the country. However, the price of solar panels and other solar equipment is also one of the highest in the nation. As such, many New Yorkers wonder if solar is a sound investment in the area. The short answer is that solar is a great option for most New York residents, but it’s not ideal for everyone. Below, you’ll find information on how to tell if your property is suitable for solar panel installation. We’ll discuss the benefits of going solar that you’ll enjoy, as well as some things you should be aware of before committing to this clean energy source.
How to Figure Out if Solar Panels are Worth It in New York
Solar panels save most New York homeowners quite a lot of money, but you may end up losing thousands in the long run if your home isn’t ideal for solar conversion. Below, we’ll discuss the different factors that make your home a good candidate for solar so that you can assess your own solar viability.
What’s Your Home Electricity Consumption?
First, you should look at your past energy bills for your average monthly consumption. Most New York homeowners consume around 602 kWh per month, which puts them well below the national average in terms of energy needs. However, the electricity rates are also approximately 18.26 per kWh, which is significantly more expensive than the national average. Generally speaking, solar will be worth it for your home if you consume more than 500 kWh monthly, as this gives you plenty of room to save money on your electric bills and recuperate your investment. In New York, even homeowners that consume a bit less than this benchmark amount will likely find solar a sound investment, given the high energy rates.
How Much Is It To Go Solar in New York?
Most New Yorkers pay around $2.95 per watt for solar equipment, which puts the price of solar panels in NY well above the national average of $2.66. With most homeowners in the area requiring a 6.5-kilowatt system to offset electricity usage, the average total price to go solar in the Empire State is about $14,190 after the federal tax credit is considered. Solar panels provide more value where energy consumption or energy rates are high. New Yorkers use less electricity than most US residents, but they pay significantly higher prices for the electricity they use. As such, solar is quite valuable in New York and considered a great investment.
What’s the Payback Period for Solar in New York?
Home solar panel systems usually pay for themselves over time, as the savings on electric bills gradually accumulates. The time it takes for this to happen is called the solar panel payback period, and it’s one of the most comprehensive metrics you can use to assess solar viability. The average payback period in New York is around 10 years, which is below the national average of 12 years. Most residents will have an estimated payoff timeline of between 7 and 13 years. You can use a solar calculator to estimate your payback period, but having an experienced solar company estimate it for you will yield a more accurate timeline. If your payback period is longer than 13 years, your solar power system will still likely save you quite a bit of money over time, but it will take longer to recuperate your investment, and your total return will be lower. You’ll have to weigh the ROI against your financial situation to see if going solar is worth it for you.
What Are Average Buy-Back Rates in New York?
One of the best perks of going solar is net metering, which is mandated in most states now. Net metering allows you to produce more energy than you need and sell the excess to your utility company for a credit to your electric bills. This policy makes it significantly easier to eliminate your energy bills, which reduces your payback period and boosts your return on investment. New York’s Public Service Commission does mandate net metering, which is great news for solar customers in the Empire State. The rate at which you’re credited for your overproduced energy isn’t set, but many electric companies offer the retail rate and credit your bill in a one-to-one ratio. Most New York solar customers, therefore, don’t have to install a solar battery to eliminate their energy expenses, but you should check your company’s policy before committing.
How Much Sun Does Your Roof Receive?
Solar panels use available sunlight to produce electricity. Since the energy produced by your solar system is what saves you money, the more sun your roof receives, the more valuable solar panels will be for your home. New York receives an average of 224 sunny days annually, putting the Empire State above the national average of 205 days. From a sunlight-availability perspective, New York is better than most states for solar panel installation. There are some home-specific factors you’ll need to consider as well, though. These include shading on your property from trees or buildings and the direction your roof faces. Shading will limit the amount of sun absorbed by your panels, which ultimately reduces your solar savings. South-facing roofs will receive the most direct sunlight and benefit the most from solar panels, but west-facing roofs can work as well in the US.
What’s the Outlook on Solar in New York?
New York is one of the best places in the country for solar installation, as this renewable energy source is widely accepted throughout the state, and residential solar conversion rates are significantly higher now than they were a decade ago. Commercial and community solar have also become quite prevalent in the state. New York’s policies have long been eco-friendly, and the state tax credit and other state incentives are part of what makes going solar here so enticing. Although the price of solar equipment is higher on a per-watt basis than in most of the country, many residents find it worth the investment because of the pro-solar policies in place in the state.
Benefits of Solar Energy in New York
Once you decide that a solar energy system is suitable for your home, you’ll open yourself up to quite a few benefits, including financial incentives and environmental upsides. We’ll discuss some of the more appealing solar benefits in New York below.
Electricity Bill Savings
By far, the most appealing part of going solar in NY is the savings you’ll enjoy on your utility bills. New Yorkers spend around $110.47 per month on electricity at some of the highest electricity rates in the country. With many New York solar customers eliminating their power bills, that equates to $1,326 in annual savings over the 25+ years of expected system performance. After the panels pay for themselves, they’re expected to save you an additional $24,387! Plus, going solar means you’ll be less dependent on your electric company, which means you can avoid the expected energy price increases for the years your system is functioning. This lets you budget and plan better for the future.
Lower Taxes & Access to Other Incentives
New York is a very solar-friendly state, and part of the reason solar conversions are so popular here is because of the federal and state solar incentives. One of the most significant incentives is the federal solar tax credit (ITC), which gets credited to your federal income tax liability for the year your system is installed. The ITC is for 30% of your total installation expense, so it averages out to around $5,753 in New York. There are additional New York solar incentives listed below:
- New York Solar Tax Credit: This is a state tax credit for up to 25% of your total system expense or $5,000, whichever is lower.
- NY-Sun Megawatt Block Incentive: This is a rebate program that offers money back for each kilowatt you install. The rates vary based on availability and other factors.
- New York Solar Sales Tax Exemption: New York waives state sales tax on all solar equipment and installation expenses to reduce the upfront financial burden of going solar.
- Net Metering: As mentioned above, net metering makes it much easier to eliminate your electric bills, which increases your return on investment (ROI) in the long run.
Home Resale Value Increase
Many solar customers don’t realize that solar panels increase home value. According to research completed by Zillow, the average US home will increase in value by around 4.1% with solar panel installation.3 Given the average home value in New York of $753,782, that equates to an average value bump of around $30,905, which more than makes up for the price most New Yorkers will pay for solar.4 The bump in value could be even higher in areas like New York City (NYC), Brooklyn, Queens and Long Island, where property values tend to be higher than upstate. It’s important to note that solar leases and power purchase agreements (PPAs) will not provide this same benefit. You’ll have to use solar financing or a cash purchase if you want your solar panel system to boost your home value.
Clean, Renewable Energy
Given that many New Yorkers are environmentally conscious, some solar customers will care more about their solar panels’ effects on the environment than the financial incentives. Installing solar panels means reducing your dependence on fossil fuels, meaning you’ll reduce your carbon footprint, emissions and pollution by converting to solar. You’ll also be less reliant on your utility company, so you can avoid any increases in electricity rates for the 25+ years your system will produce energy.
What to Look Out For When Considering Solar in New York
Going solar is not necessarily a complicated process, but there are some things you should be on the lookout for when converting your home. We’ll discuss some important considerations below.
The upfront fees will be a crucial factor for any solar customer, but especially in New York, where the per-watt price for solar equipment is well above the national average. If you’re looking to keep your initial investment to a minimum, choosing a solar loan that requires a small down payment — or none at all — is one of the best things you can do. You can also choose cheaper solar panel brands and resist the urge to include add-on products — like solar batteries and electric vehicle chargers — to your home solar project.
The solar panel payback period we mentioned above is a great metric for determining your solar viability, but you can also use it to estimate your ROI. The average payoff time in New York is around 10 years, with a typical range of 7 to 13 years. If your payback period is longer than 13 years, your total ROI will be lower than the average of $24,387 in the state.
Net Metering Policies in New York
Net metering is a wonderful perk for solar customers that bumps up the ROI and makes it easier to pay back the price of solar panels in a reasonable timeframe. New York does mandate net metering, but the rate at which customers get credited for their excess energy isn’t set by the state. As such, you’ll need to check with your utility provider for your net metering policy specifics. If you don’t have a decent program, you might need to pay more for a solar battery to help eliminate your monthly electric bill.
Pending Policies & Changes to Incentives
The solar industry changes and expands on a regular basis, so all of the policies and incentives mentioned above are subject to change. New incentives and rebate programs could become available, and existing ones could change or disappear. You should check for updates to policies and programs before committing, although it’s usually not wise to put off going solar to wait for better incentives.
Weather & Climate in New York
Solar panels provide the most value in areas near the equator, where the sunlight is most intense. Many New Yorkers might be concerned about the northern location in the US and the number of cloudy days that would reduce the amount of available sun. However, the Empire State still receives more sunny days than most other states. The majority of solar customers will find that there is plenty of sun to make solar panels a worthwhile investment in the area. Other concerns in New York include the occasional nor’easter, snow coverage and the above-average rainfall. Thankfully, a good warranty from your solar installer should quell most concerns with inclement weather. Snow coverage will limit energy production, but the precipitation in New York isn’t enough to make solar panels a poor investment, and it will naturally keep the panels clean.
Companies Pushing Solar Leases or PPAs
Your final consideration will need to be the solar installer you choose to handle your installation. Unfortunately, there are some solar companies that don’t have your best interests at heart. The primary offenders will be those installers offering “free panels” or pushing solar leases. Solar leases are far less appealing than most prospective solar customers think, as they don’t boost your home value, they don’t let you take advantage of the federal tax credit and they lead to a much lower ROI than other financing options. Unfortunately, there have been reports of solar scams from companies claiming to be affiliated with solar companies or local utility companies to gather personal information from residents.5 Other companies pushing leases and claiming affiliation with utility companies have been reported throughout the state, many of which cite unrealistic solar incentives and rebates to get customers to sign. You should always be careful to work with a reputable and vetted solar installer to avoid any scams or other issues.
Wrap Up: Is Solar Worth it in New York?
Generally speaking, New York is an excellent place for solar panel installation, and it routinely ranks as one of the best states in the country for solar conversion. While solar panels save New Yorkers around $24,387 on average, not every homeowner will benefit from installing solar panels. Assessing your home’s solar viability is crucial before making any decisions. Some factors to consider include your average monthly energy consumption, the price of your solar array, the direction your roof faces, shading on your property, and more. We recommend having a reliable solar installer assess your home for you and help you decide if solar conversion is right for you.
Read More About Going Solar
Frequently Asked Questions
The EcoWatch team frequently gets questions from New York residents about the potential savings they might enjoy with solar panels. Below are some of the questions we see most often, which you might have as well. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
The average New Yorker will have a solar panel payback period of around 10 years, but the typical range is between 7 and 13 years, depending on how suitable your home is for solar conversion. Your timeline could fall well outside of that range, depending on several factors. These include shading on your roof, how much you spend on electricity every month, the orientation of your house, the system size you need, your home’s energy efficiency, and more. You can contact an experienced solar installer if you need help calculating your solar panel payback period.
In most cases, yes, solar will save a significant amount of money. Solar panels produce electricity and reduce how much power you have to purchase from your electric company. The typical homeowner in New York State pays around $110.47 per month for power. If you can eliminate your electric bill — which is a distinct possibility in NY, thanks to the net metering programs available — you’re expected to pay off your solar electricity system with energy savings in 10 years. After that time, your panels should provide around $24,387 in additional energy savings over their lifespan.
Yes, provided you use a solar loan or a cash purchase to pay for your solar panels, they will increase your home value. Research from Zillow suggests that the average property value will go up by around 4.1% from installing solar. In New York, that comes out to a massive bump in the value of around $30,905!
Yes, permits are strictly required for solar panel installation in New York. Your permitting agency uses permits and inspections to ensure it’s safe to install panels on your home and that the connection to the electric grid is made properly. Most solar installers will complete the permitting process for you as a part of the design and installation process.
You can install your own panels in New York, but it’s not a good idea in most cases. It’s dangerous to work with a rooftop solar system, and while you’ll save some money on labor, you’ll also be putting yourself at greater risk of property damage and equipment malfunction. We suggest leaving the installation process to the professionals.