Doing Solar Business in New York

NY-Sun offers incentives based on the type of solar project and its location in New York State. Projects can be installed on the roof (roof mounted) or ground (ground mounted). For more information on available incentives, visit the Available Incentives section below.

On-site

On-site projects may be residential, nonresidential, or commercial/industrial installations. These projects are connected to a customer utility account and serve an on-site load. They may also be installed at a new or existing site. For energy injected into the grid, projects under 750 kW AC will receive compensation under Net Energy Metering (NEM) and larger projects will receive the Value of Distributed Energy Resources (VDER) or the Value Stack, a new mechanism to compensate distributed energy resources (for more information, visit the Utility Crediting/Compensation section below).

Remote Metered

A single remote metered project can provide bill credits to one or more remote sites to offset their electric bill. In other words, the energy produced by a remote metered project can be credited to one or more customer utility accounts. This type of installation receives compensation under the Value Stack. For remote metered and community solar projects, the “host site” and all offtakers (customers receiving the bill credits from a DER) must be located in the same utility service territory.

Community Solar

A community solar project is a single large installation that serves multiple offtakers, which may be residential or commercial. NY-Sun depends on contractors and builders to construct community solar projects throughout the State.

It is important to note that a community solar project must provide remote bill savings to 10 or more offtakers, each of which must receive at least 1,000 kWh per year. Community solar projects may have fewer than 10 offtakers if the project is located on a multifamily building and is serving its tenants. Additionally, no more than 40% of the project output can be dedicated to large offtakers (those with a demand charge on their electric bill). Community solar projects may be eligible for additional incentives like the Community Credit or Community Adder.

In accordance with the New York Municipal Home Rule Law, every local government in New York State has the power to adopt and amend local laws relating to property, affairs, and government. There are 1,607 municipalities in the State and most have different requirements. Contractors and builders must work directly with the municipality they are conducting business in to meet their permitting, code, and licensing requirements.

Permitting Steps

Step 1: Identify the authority having jurisdiction (AHJ) and check their permitting, code, and licensing requirements.

• Take a bottom-up approach by starting with the village, town or city's Building Department. In some jurisdictions you may be directed to the county.
• Note, some AHJs will not be a village, town, or city. For example, the AHJ for projects installed in school districts is the New York State Education Department. The AHJ for projects on military sites varies and could be the New York Division of Military and Naval Affairs, the US Department of Defense, or the US Army Corps of Engineers.

Step 2: Apply for permits and zoning board approval, if necessary. Special Use Permits are required for large solar projects.

Step 3: The appropriate AHJ will issue permits and be the lead agency in the State Environmental Quality Review (SEQR), if applicable.

Step 4: Local code officials will require an inspection after construction to ensure that projects meet all necessary building codes.

• NYSERDA-supported projects may be subject to additional Quality Assurance inspections. These inspections are not meant to be punitive, but rather to ensure project success. For more information, visit the Quality Assurance Reference Guides section on NY-Sun’s Resources for Contractors page.

Unified Solar Permit

To reduce costs and delays associated with permitting solar projects, NYSERDA and the New York State Department of State developed the New York State Unified Solar Permit. The permit applies to small residential projects 25 kW DC and under. Local governments can pass legislation to adopt the Unified Solar Permit in their jurisdiction. To date, over 300 AHJs have adopted the permit.

Contact the AHJ to determine if that jurisdiction uses the Unified Solar Permit. For more information, including more about the permit and the benefits communities and contractors can expect to receive, visit NYSERDA’s Unified Solar Permit page.

Model Solar Energy Local Law

Since siting solar projects sits at the local level, NYSERDA developed the Model Solar Energy Local Law (Model Law) to assist local governments and officials in examining and adopting their own local laws, regulations, and policies. The Model Law serves as a resource to inform local officials on the processes of installing, operating, maintaining and decommissioning solar energy systems in their respective jurisdictions. Note, NYSERDA does not set these policies. For more information, including the Model Law and FAQs, visit the Model Solar Energy Local Law section of the New York State Solar Guidebook.

Building Codes

The New York State Department of State sets uniform building codes for the State, excluding New York City. The New York City Department of Buildings sets building codes for New York City.

For contractors that participate in the NY-Sun program, regardless of location in the State, the program requires that all participating contractors and their projects abide to the New York State Uniform Codes adopted by the New York State Department of State.

Licensing Requirements

New York State does not have a statewide solar license or licensing requirement. Some authorities having jurisdiction (AHJs) will require that contractors have an electrical or home improvement license. In most cases, AHJs will allow reciprocal agreements, meaning they will recognize licenses from other jurisdictions. New York City is an exception and does not allow reciprocal agreements. Contact the AHJ for details on their requirements.

New York State Environmental Quality Review (SEQR)

The New York State Environmental Quality Review (SEQR) requires all State and local government agencies to consider the environmental impacts and social and economic factors of certain solar projects. SEQR provides a systematic process to identify and consider environmental factors early in the planning of an action, allowing the opportunity to modify projects to avoid adverse impacts. SEQR is required for projects with a footprint over 10 acres or over 2.5 acres in agricultural districts. If a SEQR is required, contractors must prepare an Environmental Assessment Form (EAF).

There are two types of EAFs:

• Short Environmental Assessment Form (SEAF)–used for evaluating Unlisted actions
• Full Environmental Assessment Form (FEAF)–used for evaluating Type I actions

For more information, including a SEQR process flow chart, visit the State Environmental Quality Review (SEQR) for Solar section of the New York State Solar Guidebook.

Solar on Agricultural Land 

As the clean energy transition unfolds, it is important to adopt a balanced approach that adequately preserves agricultural land. Certain New York State policies apply when developing solar on agricultural land. For example, a conversion penalty is imposed for sites located in Agricultural Districts that are converted to a nonagricultural use within five years of the last agricultural assessment (or eight years if the farmland is located outside an Agricultural District). 

Also, projects sited in State Certified Agricultural Districts that are applying for NYSERDA incentives will be subject to Agriculture and Markets Law (AML) Section 305(4). AML Section 305(4) requires, in part, that any state agency, public benefit corporation, or local government which intends to advance public funds for the construction of a commercial facility to serve non-farm structures in an Agricultural District must file a Notice of Intent [PDF] with the Commissioner of Agriculture and Markets and with the County Agricultural and Farmland Protection Board. 

Furthermore, projects submitted to the Commercial/Industrial Program that are in an Agricultural District will be required to meet the New York State Agriculture and Markets (NYSAGM)’s Guidelines for Solar Energy Projects – Construction Mitigation for Agricultural Lands [PDF].  Projects that submit an interconnection application after November 1, 2020, and that are on over 30 acres of mineral soil group 1-4, are required to make a Mitigation Fund Payment [PDF]. NY-Sun developed a tool for these projects to estimate their mitigation payment [XLSX]. 

Additionally, municipalities in the State commonly utilize special use permits and site plan regulations to accommodate solar on agricultural land. For more information on these two common land-use tools, visit the Using Special Use Permits and Site Plan Regulations to Allow Large-Scale Solar Installations While Protecting Farmland section of the New York State Solar Guidebook.

Structural Requirements for Rooftop Solar

To receive incentives through NY-Sun, it is required that all rooftop solar installations be reviewed and stamped by a New York State Professional Engineer (PE) or a New York State Registered Architect (RA). Rooftop solar energy systems are classified as a Type II action and do not require a SEQR. For more information, visit the System Technical Requirements section of the NY-Sun Program Manual.

System Technical Requirements

As a NY-Sun participating contractor, the program identifies specific technical requirements for things such as solar modules, inverters, and metering. For more information, visit the System Technical Requirements section of the NY-Sun Program Manual.

Standardized Interconnection Requirements (SIR)

There are State and utility requirements for interconnecting solar energy systems to the grid. The New York State Standardized Interconnection Requirements (SIR) was created by the Public Service Commission (PSC) to explain the process and information required for submitting interconnection applications to utilities.

It is important to understand the technical requirements and electric service regulations of the utility in which you are doing business. Check with the appropriate utility to verify their interconnection requirements.

• Central Hudson Gas & Electric
• Consolidated Edison
• National Grid
• New York State Electric & Gas (NYSEG)
• Orange & Rockland Utilities
• PSEG Long Island
• Rochester Gas & Electric

For more information, including the SIR document, visit the Department of Public Service's (DPS) website.

Coordinated Electric System Interconnection Review (CESIR)

The Coordinated Electric System Interconnection Review (CESIR) is a comprehensive engineering study to understand a project’s impact to the utility system and determine what construction upgrades, if any, will be required. CESIR is often required for larger systems (50 kW to multi-MW). If a CESIR is required, the review will occur after an interconnection application has been submitted to the utility. There are multiple fees associated with the review. For more information, please check with the appropriate utility.

Utility Ombudsman Contact Information

DPS maintains ombudsman contact lists. Each utility has a dedicated ombudsman (also known as an ombudsperson) whose role is to act as a resource between distributed generation providers and the utility.

NY-Sun MW Block Program

The MW Block Program is NY-Sun’s incentive program, where the incentive rate is determined by the current MW block. NY-Sun assigns incentive rates to each of the three regions: Con Edison, Long Island, and Upstate. The incentives are broken down further into three sectors: residential, nonresidential, and commercial/industrial. Each sector is then broken into blocks that are designated an allocation of MW eligible for NY-Sun incentives. Incentives remain available until all blocks within a region/sector are fully subscribed. To view real-time information on the rates and availability visit the MW Block Dashboard.

Contractors may assign payments to third parties for nonresidential and commercial/industrial projects. For more information on third party payments, visit the Assignments section of the NY-Sun Program Manual.

NY-Sun Incentive Adders

NY-Sun offers several incentive adders, monetary payouts that may be applied in addition to the base (MW Block) incentive. Incentive adders include:

• The Community Adder for community solar and/or community solar plus storage projects. The rate and availability of the Community Adder changes so it is important to check the dashboard for the most up to date information.
• The Brownfield and Landfill Adder for eligible projects sited on brownfields or landfills.
• The Multifamily Affordable Housing Adder for eligible multifamily affordable housing buildings.
• The Parking Canopy and the Rooftop Canopy Adder for canopy projects located in Con Edison’s service territory.

For more information, visit the Incentive Structure section of the NY-Sun Program Manual.

Solar + Storage

Incentives for energy storage systems up to 5 MW, when serving a demand metered customer or interconnected directly on the distribution system, are available through the Retail Energy Storage Incentive Program. If a project is pairing a solar energy system with an energy storage system, that contractor must be approved by both NY-Sun and the Retail Energy Storage Incentive Program. Similar to NY-Sun, the Retail Energy Storage Incentive Program provides funding through declining blocks that are broken out by region. For more information, including incentive structure and how to submit a project application, visit the Retail Energy Storage Incentive Program Manual[PDF].

Single-family residential incentives are currently available only on Long Island for storage paired with a solar energy system and applications are submitted through NY-Sun. The energy storage may be paired with a new solar energy system or as a retrofit to an existing system. Contractors pursuing this incentive are strongly encouraged to participate in LIPA’s Energy Storage Rewards program. LIPA rewards customers with an annual payment, through their chosen aggregator, for supplying power from the batteries to the customer’s home or into the grid a few times each year between May 1st and September 30th.

NY-Sun and other NYSERDA incentives are only available for participating contractors. To become a NY-Sun participating contractor you must complete an application. Applicants must submit project references, construction photos of past projects, organizational charts and resumes of key company personnel, quality assurance plans, and more, as part of the application. NY-Sun has a document checklist for new contractors to use during the application process. For more information, including the document checklist and the online application, visit NY-Sun’s Become a Participating Contractor page.

After you are approved to become a participating contractor you may begin submitting project applications to receive incentives.

Which NY-Sun Program do I participate in?

This depends on the location and system size of your project.

In the Con Edison region:

• All projects 7.5 MW DC and under should apply to the Nonresidential Program.

In all other regions:

• Projects under 750 kW DC should apply to the Residential & Nonresidential Program.
• Projects 750 kW DC and greater should apply to the Commercial & Industrial Program.

Uniform Business Practices for Distributed Energy Resource Supplies (UBP-DERS)

To become a participating contractor, Community Distributed Generation (CDG) Providers and On-Site Mass Market Distributed Generation Providers are required to submit the Distributed Energy Resource Supplier (DERS) Registration form. Not all parties are required to register. Visit that link to find out more.

As part of the DERS Registration form, new registrants are required to submit a copy and proof of acceptance of their registration with the New York State Department of State and a copy of their certificate of assumed name (if applicable). New registrants are also required to submit the Service Provider Contact Information Form as well as other supplemental information required by the Department of Public Service (DPS).

NY Green Bank

Large solar projects may access financing through the NY Green Bank, a division of NYSERDA. The NY Green Bank is a specialized financial entity working with the private sector to increase investments into New York’s clean energy markets, creating a more efficient, reliable and sustainable energy system. The NY Green Bank typically works with entities already achieving success in clean energy, but whose progress is constrained by a lack of available financing.

Green Jobs – Green New York

The Green Jobs – Green New York (GJGNY) Program provides New Yorkers with access to energy assessments, installation services, low-interest financing, and pathways to training for various green-collar careers. The low-interest financing can be accessed by residential customers installing solar. While GJGNY financing is not available for contractors, it supports solar by providing accessible financing to New Yorkers.

Sales Tax

Retail sales and installations of residential and commercial solar energy equipment are exempt from the 4% New York State sales and use tax rate and the 3/8% sales and use tax rate imposed in the Metropolitan Commuter Transportation District (the district includes the counties of New York [Manhattan], Bronx, Kings [Brooklyn], Queens, Richmond [Staten Island], Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester).

Furthermore, purchases are exempt from local sales and use taxes in some jurisdictions that specifically enacted the sales tax exemption. It is important to note that some jurisdictions may exempt residential solar energy system equipment from local sales tax but not commercial equipment.

For lists of jurisdictions exemption status for residential and commercial solar energy systems equipment, visit the New York State Department of Taxation and Finance’s website and search for publications “PUB-718-S” and/or “PUB-718-CS.” Publication number “PUB-718-S” pertains to residential solar energy system equipment and publication “PUB-718-CS” pertains to commercial solar energy system equipment.

New York State Property Tax Law

The New York State Real Property Tax Law section 487 allows any increase in accessed value of real property due to the installation of a solar energy system to be exempt from taxation for a period of 15 years. Additionally, solar energy systems that are owned or controlled by New York State or a New York State department, agency, or public authority are permanently exempt from taxation. However, some jurisdictions may not uphold this exemption, making the added value of a solar energy system fully taxable. So be sure to check with the authority having jurisdiction (AHJ). Furthermore, by law jurisdictions cannot partially opt out of the law, meaning they cannot tax large solar projects while exempting small residential systems. Some jurisdictions that exempt the value of solar from local property taxes may require a payment-in-lieu-of-taxes instead.

New York City Solar Electric Generating System Tax Abatement

Similar to the New York State Real Property Tax Exemption, the Solar Electric Generating System Tax Abatement provides a property tax abatement to properties that use solar power in New York City. The abatement lasts for a four-year period and the amount of the benefit depends on the date your solar service starts. It is important to note that the New York City Department of Buildings determines eligibility and approves the application while the New York City Department of Finance administers the benefit. There are also certain exemptions, like if projects receive ICAP, 421-a, 421-b, 421-g, or pay a payment-in-lieu-of-taxes, they are not eligible for the abatement.

Payments-in-Lieu-of-Taxes (PILOT)

A payment-in-lieu-of-taxes (also called a PILOT or PILOT Agreement) is essentially an annual fee that is paid to the AHJ as a replacement for the taxes it would have otherwise collected. By law, PILOT amounts cannot exceed what the tax amount would have been without the exemption. For more information, visit the Solar Payment-in-Lieu-of-Taxes (PILOT) section of the New York State Solar Guidebook.

New York State Tax Credit

The New York State Solar Energy System Equipment Credit allows you to deduct a percent of qualified solar energy system equipment expenditures on your Resident Income Tax Return. This tax credit is only available for primary residential installations and is limited to $5,000.

There are two compensation models for solar in New York State: net metering and the Value Stack.

Net Metering

Net metering, the compensation structure found in many other states, is when a customer-sited renewable energy system is connected to the utility grid through their electric meter. The grid supplied electricity and the credits for energy exported to the grid by the system are reconciled at the end of each billing cycle. If any surplus credits remain, they are carried over to the next term. Projects under 750 kW AC that exclusively serve a host load may choose net metering or the Value Stack.

The Value Stack

The Value Stack is a new methodology that New York created to compensate energy produced by distributed energy resources (DERs) in a more robust manner than net metering. The Value Stack was developed with feedback from utilities, project developers, and other external stakeholders to ensure an accurate and fair compensation model to provide project owners and developers with reasonable revenue certainty and bankability.

How the Value Stack Works

1

A developer develops and interconnects a DER.

2

The electricity produced by that system is injected into the grid.

3

The utility determines the value of the energy produced using the Value Stack methodology.

4

The utility allocates the monetary value of the energy produced to the offtaker's bill. For a CDG project, the developer directs the utility how to split the credits between many offtakers.

5

Offtakers pay a subscription fee to the DER developer. Steps 2-5 repeat each month.*

*Currently, the offtaker (a customer receiving bill credits from a DER) will receive a separate bill from the developer. Under consolidated billing, the payment will be made by the utility to the developer “behind the scenes” and offtakers will only see their single electric bill.

For more information, including the Solar Value Stack Calculator, data, and more, visit NY-Sun’s Value Stack page.

Solar for All

Solar for All is a New York State utility bill assistance program for low income households. The State is funding solar farms to benefit homeowners and renters who may not be able to access solar (clean energy). Through Solar for All, eligible New Yorkers can get the benefits of clean energy while lowering their energy costs.

Affordable Solar and Storage Predevelopment and Technical Assistance

This solicitation provides funding to address resource gaps and solve market barriers preventing the development of solar and energy storage installations benefitting LMI households. The solicitation provides funding for the implementation and operation of solar and/or storage installations for affordable housing and for the implementation and operation of community solar installations that will offer benefits to LMI households and/or affordable housing.

Clean Energy Workforce Development

NYSERDA’s Clean Energy Workforce Development is preparing the current and future workforce to meet the demands of clean energy jobs with a commitment of more than $100 million through 2025. Funding provides opportunities for activities as diverse as training building and operations staff to properly operate and maintain building systems, providing on-the-job training for new clean energy workers, enhancing curricula to meet the demands of clean energy employers, and more. Funding is available under five different workforce development and training opportunities:

• Energy Efficiency and Clean Technology Training
• On-the-job training
• New York State Clean Energy Internships
• Building Operations and Maintenance
• Clean Energy Training Services

Other Relevant NYSERDA Programs

Other NYSERDA programs that you may find useful are:

• Energy Storage
• Offshore Wind
• Solicitations for Large Scale Renewables

NY-Sun Program Manual

Access rules and guidelines for participating NY-Sun projects. There are separate manuals for Con Edison and Upstate and Long Island.

New York Solar Guidebook for Local Governments

Obtain information, tools, and step-by-step instructions available to support local governments managing solar energy development in their communities. The Guidebook also includes resources that are helpful for contractors, including:

• Rooftop access and ventilation requirements in accordance with the most recent New York State Residential Code
• Step-by-step instructions on completing a State Environmental Quality Review (SEQR) for solar projects
• Land-use tools for siting solar while protecting farmland
• Navigating solar installations in agricultural districts

NY-Sun's Value Stack Page

Find information and resources about New York’s new compensation structure for distributed energy resources (DERs).

NY-Sun's Resources for Contractors Page

Discover resources developed by NY-Sun to support participating contractors.

NY-Sun's Email List

Sign up to receive email updates from NY-Sun.

New York Battery Energy Storage System Guidebook for Local Governments

Learn about resources in the Guidebook designed to assist local permitting authorities and the energy storage industry across New York State in navigating the siting and review processes for the development of battery energy storage projects.