Yes. Solar remains one of the most effective ways for New Yorkers to combat some of the highest and fastest-rising electricity rates in the country.

While the federal tax landscape for solar purchases changed on January 1, 2026, New York homeowners have multiple paths—including direct ownership and Third-Party Owned (TPO) models—to lock in long-term savings. Whether your goal is immediate monthly savings or the highest possible long-term ROI, solar is “worth it” in 2026 as a hedge against a volatile grid.

The 2026 New York Energy Reality: Rising Costs and Shifting Incentives

New Yorkers are currently facing a “perfect storm” of energy costs. With major investments in grid modernization, utility companies are passing those expenses to consumers through increased electricity rates.

• High Power Prices: In 2026, average residential rates have climbed to between 23 and 27 cents per kilowatt-hour (kWh)—well above the national average—and rates are rising in 2026 for at least three utilities service New York (see below).

• The Federal Tax Shift: The homeowner-claimed tax credit for buying solar expired at the start of this year. However, New York still offers a 25% state tax credit worth up to $5,000. Plus, Third-Party Owned (TPO) solar options can still access a business-claimed federal tax credit through the end of 2027.

• The “Winter Proof” Strategy: New York’s net metering policies allow you to use the grid like a giant battery. You “bank” excess power during the long summer days to offset your heating and lighting costs during the dark winter months. Favorable net metering policies are becoming rare, and New Yorkers would be wise to lock in the current structure before it’s gone.

Notable New York Rate Hikes in 2026

Choosing Your Path: Three Ways to Save in 2026

There are three basic options to reduce your electricity costs with solar in New York. The “right” strategy depends on your savings goals, cash position, and preferences.

Direct Ownership (Cash or Loan)

Purchasing solar with cash or a loan offers long-term cost savings, full control over equipment selection, and added value to your home. It also means being responsible for monitoring, maintaining, and insuring your system throughout its lifetime.

• Why it’s worth it: While the federal solar tax credit has expired for residential solar purchases, the New York State Solar Tax Credit is alive and well. New York allows owners to claim 25% of the system cost (up to $5,000) against their state income taxes to reduce the net cost of going solar.

• Best for: Homeowners who want to invest in long-term savings, control equipment and usage, and increase their property value.

Standard Lease or Power Purchase Agreement (PPA)

Standard leases and PPAs are like switching utility providers (i.e., a third-party solar company) to replace your electricity bill with a lower, more predictable cost for solar. The lease or PPA provider owns the system, provides monitoring and maintenance, and claims federal incentives to reduce your monthly payments.

• Why it’s worth it: Leases and PPAs still qualify for a federal tax credit through the end of 2027. The provider claims the commercial tax credit (Section 48E) and passes that value to you via a lower monthly rate.

• Best for: Homeowners who want $0-down solar and immediate monthly savings without taking on a loan or maintenance responsibilities.

Prepaid Solar

Prepaid Solar is an emerging financing option that allows you to pay for solar energy upfront, at around 70% of the cost to purchase a solar system. The Prepaid provider initially owns the system, provides monitoring and maintenance, and claims the 48E federal tax credit. In Year 6, there is usually an option for you to “buyout” the contract and take ownership of the system (typically for little to no cost, since the balance is paid upfront).

• Why it’s worth it: This combines the “no monthly bill” benefit of ownership with the security of a third-party monitoring and maintaining the system in its early years. Because it is technically a Third-Party Owned system, the solar company can claim a federal tax credit to lower your prepayment amount.

• Best for: Cash buyers who want the highest possible return on investment and the peace of mind of a third-party being responsible for maintenance and repairs while the system is new and most likely to experience issues.

Which path best suits your savings goals? Team up with a solar.com Energy Advisor to review custom proposals and see your savings potential.

The “New York Bonus” Incentives

Regardless of which path you choose, New York offers several “stackable” benefits that make solar worth it in 2026:

• NYS Solar Tax Credit: A direct reduction of your state tax liability by up to $5,000. In many cases, you can claim this credit for Third-Party Owned solar, but situations may vary based on your specific agreement and tax situation.*

• 15-Year Property Tax Exemption: Purchasing solar panels increases your home’s value, but New York law prevents your property taxes from increasing as a result for 15 years.

• State Sales Tax Exemption: Solar equipment and installation are exempt from New York state sales tax, saving you thousands in a direct purchase.

*This article does not constitute tax advice. Consult a licensed tax professional regarding your personal tax credit eligibility.

The Verdict: Is Solar Worth It in New York?

In 2026, New York solar is about hedging against rapid and volatile utility rate increases. Whether you choose to own your system to build home equity or opt for a TPO plan to lower your monthly overhead, solar is a “worth it” investment because it replaces an unpredictable, rising utility bill with a stable, lower-cost energy source.

Schedule a strategy session with an expert Energy Advisor to find your best path to solar savings.

Frequently Asked Questions for New Yorkers

Did I miss the federal tax credit?

If you choose a Third-Party Owned (TPO) plan, no. A business-claimed tax credit is still active through the end of 2027 and can be used to lower your solar costs. If you buy the system outright, the federal 25D credit is no longer available, but you can still claim the New York State credit, worth 25% of the system cost up to $5,000.

Is solar worth it if I have a small or shaded roof?

It depends. With New York’s high utility rates, even a smaller system can provide a significant return. Our platform uses satellite imaging and a solar irradiance scoring system to identify if a roof is suitable for solar. If it’s not, we’ll be the first to tell you!

What happens if it snows on my panels?

Snow usually slides off solar panels quickly (and cleans them) because they are smooth and installed at an angle. Even if they are covered for a day or two, New York solar systems are sized based on annual production, so a few snowy days won’t ruin your yearly savings.

Yes, solar is still worth it in California in 2026—but the strategy for unlocking your full savings potential has shifted.

As of January 1, the homeowner-claimed tax credit for buying solar panels has expired. However, California homeowners have a brief window to benefit from the business-claimed tax credit through Third-Party Owned solar options, such as leases, Power Purchase Agreements (PPAs), and Prepaid Solar.

In this new era, your total return on investment, when your savings kick in, and whether solar is “worth it” depends largely on how you go solar.

Jump Ahead:

• How You Go Solar in 2026 Matters
• Comparing Your Solar Options in 2026
• Economic Snapshot: Utility Hikes vs. Solar Savings
• Final Verdict: Is Solar Worth It in California?
• Common Questions About Solar in California

The 2026 Shift: How You Go Solar Matters More

For over a decade, buying solar with cash or a loan was the best path to cost savings for Californians in a position to claim the federal tax credit. With new tax credit rules in 2026, it’s worth considering a few strategies to see which one best aligns with your savings goals.

Here’s why:

• So Long, Homeowner Tax Credit: Under the “One Big Beautiful Bill,” the federal tax credit claimed directly by homeowners who purchase solar and/or battery storage ended on January 1, 2026.
• Tapping into the Business Tax Credit: Solar leases, PPAs, and Prepaid Solar fall under the category of Third-Party Owned (TPO) solar, and still qualify for a business-claimed federal tax credit through the end of 2027. In a TPO arrangement, the provider claims the tax credit and passes that value to you in the form of lower monthly payments or a discount to the upfront cost of going solar.

The Result: Buying solar and/or battery in 2026 means paying full price, while TPO options allow you to benefit from a federal tax credit.

Comparing Your California Solar Options in 2026

With new tax credit rules, there are three basic options for going solar in California.

Direct Purchase (cash or loan)

Own and control the system from Day 1 with no restrictions on equipment selection. Even without a tax credit to claim, direct ownership can provide substantial long-term energy cost savings in California.

Standard Lease or PPA

Go solar for $0 down and make monthly payments to a third-party owner who monitors and maintains the system. Best described as “switching utilities” to lock in a lower, more predictable cost of electricity.

Related reading: Solar Lease vs. PPA in 2026: Find Your Best Path to Savings

Prepaid Solar

Pay upfront or finance solar for around 70% of the cost to purchase a comparable system. Think of this as a “service-to-ownership” model. A third-party provider owns and maintains the system for the first 5 years, after which you have the option to “buyout” the contract (typically at little to no cost, since the balance is paid upfront). See our guide to Prepaid Solar Leases & PPAs here.

California Economic Snapshot: Utility Hikes vs. Solar Savings

California remains one of the most expensive states for grid power, with the average bill effectively doubling over the last 10 years and more rate increases expected. Here’s what homeowners are facing in 2026:

• Utility Rate Inflation: Average California rates now sit at 31 to 34 cents per kilowatt-hour (kWh), nearly double the national average.
• The “Worth It” Threshold: Most California households reach “solar parity” (where solar is cheaper than the grid) if their monthly bill exceeds $150.
• Battery Necessity: Under NEM 3.0, exporting solar energy to the grid is less profitable for customers of SCE, PG&E, and SDG&E. To make solar “worth it” in 2026, nearly all systems now include a battery to store your power for use during expensive “Peak” hours (4 PM – 9 PM) when prices can reach over 70 cents per kWh.

2026 Rate Comparison by Major Utility

There’s reason to believe California utility rates will continue rising for the foreseeable future. Page 63 of this 2025 report by the CPUC (the board that approves utility rate hikes) forecasts 6-7% average annual rate increases through 2028 for all three utilities listed above.

Final Verdict: Is Solar Worth It in California?

If your average monthly electric bill is over $150, solar is absolutely worth it to lower your electricity costs, protect your home from power outages, and power your home with clean energy. With new tax credit rules in 2026, how you go solar matters more than ever. Start by considering your savings goals.

• If your goal is immediate bill relief, then a standard lease or PPA with $0 upfront cost can be a good fit. Also, consider financing a Prepaid Solar project to spread the cost of solar over consistent monthly payments.
• If you’d rather invest in greater long-term savings, then paying upfront for a direct purchase or Prepaid Solar project is likely a better fit.

Schedule a strategy session with an expert Energy Advisor to see which option is best for your home.

Common Questions About Solar in California

Did I miss the federal solar tax credit?

Only if you buy the system outright and it wasn’t installed before January 1, 2026. There is still a business-claimed solar tax credit available through the end of 2027 that homeowners can benefit from via Third-Party Owned solar. In a standard PPA or a lease, this tax credit is “baked into” your lower monthly rate. If you choose a Prepaid Solar option, the tax credit is claimed by the provider and applied as a discount to your upfront solar costs.

Is a battery really required in California?

Technically, no, but financially, yes. Under NEM 3.0, utilities pay very little for the excess solar power you send to the grid. Adding a battery improves your solar savings by storing your excess solar power to avoid using grid electricity during expensive “Peak” evening hours.

Does solar work during a PSPS (Public Safety Power Shutoff)?

Only if you have a backup-enabled battery storage system. Solar-only systems shut down during grid outages as a safety measure to protect utility lineworkers. With solar plus backup battery, you can continue producing, storing, and using solar power during PSPS events and other outages.