The average cost of solar in New York State is likely to be around $27,000 in 2023, at a cost of around $3.56 per Watt. This is based on actual installation costs for a system sized to meet 100 percent of household electricity needs. Factor in state, utility, and federal rebates and credits, and the cost of solar could be as low as $13,000, with a solar payback period of just 5 years for some homeowners and under 11 years for most!
New York State requires 100 percent carbon-free electricity by 2040, as laid out in its Clean Energy Standard from 2019. By 2021, the state was already generating 54 percent of its energy from renewables and nuclear power, with home solar helping to make New York one of the greenest states in the country.
Going solar in NY isn’t cheap, though. In fact, it’s quite a bit more expensive than online quote generators would have you believe. By our reckoning, the average cost of a home solar array properly sized to cover the average household’s energy needs is around $27,000. Online quote marketplaces often cite figures closer to $16,000.
Before incentives
Gross cost of a 7.67 kW solar array in NY = $3.56/Watt x 7,670 kW = $27,305
After incentives
Net cost of a 7.67 kW solar array in NY = $13,734
The good news is that NY offers a plethora of state incentives to help lower the cost of going solar at home. Homeowners can also lower costs through the federal solar tax credit. And because electricity costs are much higher in NY State than in most other parts of the country, homeowners stand to save a lot by installing solar.
To create a model for the cost of solar in NY State, we looked at data from January 2022 installations and all installations in 2021, courtesy of the Lawrence Berkeley National Laboratory’s Tracking the Sun report. We also looked at national average prices paid for home solar in 2022, and forecasts for the price of solar in 2023. Finally, we factored in those online solar quotes and the average 63 percent discrepancy we’ve found between these and data from real-life installations.
Our predicted cost for solar panels in NY in 2023 is $3.56 per Watt – around $27,282 for a properly sized array.
Leafscore
The cost of home solar in New York State
Online solar quote marketplaces suggest a cost per Watt of around $3.21 for installing residential solar in NY State. The National Renewable Energy Laboratory (NREL) gives a figure of $2.95 per Watt (DC) as the modeled market price (MMP) for the U.S. as a whole in 2022. In other states, we’ve found both of these figures to be quite a bit lower than the cost of real-life installations.
Arguably the most reliable data we have for NY State comes from the Lawrence Berkeley National Laboratory’s Tracking the Sun report. Even here, though, there’s a significant difference in the cost per Watt for installations completed in January 2022 versus the average cost in 2021.
To create our model, we used a weighted average.
| Cost per Watt | Cost for 5 kW system | Cost for 7.67 kW system | |
| Online quote marketplaces | $3.21 | $16,050 | $24,621 |
| Quotes factoring in average discrepancy | $5.11 | $25,533 | $39,168 |
| NREL | $2.95 | $14,750 | $22,627 |
| LBNL mean average January 2022 | $3.96 | $19,800 | $30,373 |
| LBNL mean average 2021 | $2.58 | $12,903 | $19,794 |
| Leafscore prediction for 2023 | $3.56 | $17,785 | $27,282 |
Note that while most online quote marketplaces use a 5 kW model for cost estimates, this wouldn’t satisfy the likely household electricity needs of most NY residents.
How big a solar array do you need in New York State?
New York State consumes less total energy per person than all but two other states. The average household in NY state uses about 6,600 kWh of electricity annually, according to the Energy Information Administration (EIA). The national average is around 11,000 kWh.
In NY, annual household electricity costs around $1,200. However, total household energy bills are closer to $2,450 annually. The difference is largely made up by the use of natural gas used for space heating, which accounts for 56% of fuel use.
Let’s assume, then, that a homeowner wants to install solar in part to offset the cost of heating their home using electricity instead of natural gas. This might mean annual electricity bills closer to $2,000, and annual consumption closer to 9,170 kWh.
Using the SunWatts calculator, we expect the average NY state homeowner would want to install a solar array around 7.67 kW in size.
This is about 50 percent larger than the 5 kW array model used to generate most online quotes for home solar. Right away, then, we can see where homeowners in NY easily think home solar will cost less than it actually does.
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Lowering the cost of solar in New York State – tax credits, incentives, and tax exemptions
NY State is really pushing for more solar, with a raft of incentives to help homeowners lower the cost of installing a rooftop array. These include:
- A 25 percent residential tax credit worth up to $5,000
- State solar rebates worth up to $0.50 per Watt installed
- A state sales tax exemption to lower upfront costs.
- Low-cost solar loans
- Net metering.
Some solar loans are designed to help bridge the gap between paying for solar and receiving the federal solar tax credit. Net metering helps provide residential solar producers in NY with greater savings on utility bills. This and other incentives all help to shorten the solar payback period in NY.
Find out more about New York State solar incentives.
How much does electricity cost in New York State?
The New York State Energy Research and Development Authority (NYSERDA) provides data showing that the average cost of electricity for the first 10 months of 2022 was 21.81 cents per kWh. As we noted above, most NY households consume less electricity than the national average because they typically use natural gas or other fuels for space heating and to heat water.
Homeowners looking to install solar are likely to have already switched away from natural gas, however, given the climate impact and the effects of this fuel on indoor air quality. As such, our cost models are based on annual electricity consumption of 9,170 kWh. This gives us an annual cost of $1998.
If inflation didn’t exist and there was no change in electricity costs of usage over the next 25 years, homeowners who install solar in 2023 might expect to save the following:
- $14,395 over five years
- $28,789 over 10 years
- $43,184 over 15 years
- $75,097 over 25 years.
The historic rate of inflation in the U.S. is close to 2.4% though, and in January 2023 the inflation rate is 7.1%. As such, homeowners are likely to save far more than the figures just given. At a 2.4% rate of inflation, NY homeowners could save:
- $15,102 over five years
- $32,106 over 10 years
- $51,251 over 15 years
- $98,136 over 25 years.
Assuming inflation stays around 7.1% for at least the next few years, NY homeowners who go solar in 2023 look set to save well over $100,000 in electricity costs over the 25-year warranty period of most solar panels. And once that warranty is up, those panels continue producing energy, producing ongoing savings for years to come.
Putting it all together – Your solar payback period in New York State
NY homeowners who have used online quote generators to estimate the cost of going solar may be unpleasantly surprised by the costs cited above. However, while a figure of $16,000 sounds good, homeowners who install a smaller system are still at the mercy of rising electricity prices each year. Note, too, that state and federal incentives can dramatically reduce the upfront cost of going solar in NY.
Understanding the likely final cost of residential solar helps homeowners make more informed decisions. Part of that calculation is the solar payback period, which is the point at which savings from reduced electricity bills fully offsets the price paid for the solar installation. After that point, homeowners are truly saving each month by producing energy right on the roof.
To get a sense of possible solar payback periods in NY State, we crunch the numbers below.
Assuming a 2.4% inflation rate and average energy use and costs
Gross cost of a 5 kW solar array = $3.56/Watt x 5,000 = $17,800
Utility rebate (at an average of $0.35 per Watt) = $1,750
Subtotal = $16,050
State tax credit (25%) = $4,013
Subtotal = $12,038
Federal tax credit of 30% = $3,611.25
Net cost of solar = $8,426
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 6 years = $12,743
Six-year savings (assuming array meets 65% of electricity needs) = $8,283
Solar payback period = Just over 6 years.
Assuming a 7.1% increase in electricity costs each year and average electricity use with rebates
Gross cost of a 5 kW solar array = $3.56/Watt x 5,000 = $17,800
Utility rebate (at an average of $0.35 per Watt) = $1,750
Subtotal = $16,050
State tax credit (25%) = $4,013
Subtotal = $12,038
Federal tax credit of 30% = $3,611.25
Net cost of solar = $8,426
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 5 years = $11.524
Five-year savings (assuming array meets 65% of electricity needs) = $7,491
Solar payback period = Between 5 and 6 years.
Assuming a 2.4% inflation rate and average energy use and costs but a larger array with rebates
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
Utility rebate (at an average of $0.35 per Watt) = $2,684.50
Subtotal = $24,620.70
State tax credit (25%, to $5,000 maximum) = $5,000
Subtotal = $19,620.70
Federal tax credit of 30% = $5,886.21
Net cost of solar = $13,734
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 6 years = $12,743
Six-year savings (assuming array meets 100% of electricity needs) = $12,743
Solar payback period = just over 6 years.
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Assuming a 7.1% inflation rate and average energy use and costs but a larger array with rebates
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
Utility rebate (at an average of $0.35 per Watt) = $2,684.50
Subtotal = $24,620.70
State tax credit (25%, to $5,000 maximum) = $5,000
Subtotal = $19,620.70
Federal tax credit of 30% = $5,886.21
Net cost of solar = $13,734
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 6 years = $14,343
Six-year savings (assuming array meets 100% of electricity needs) = $14,343
Solar payback period = 5-6 years.
Assuming a 2.4% inflation rate and average energy use and costs but a larger array and no utility rebates
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
State tax credit (25%, to $5,000 maximum) = $5,000
Subtotal = $22,305.20
Federal tax credit of 30% = $6,691.56
Net cost of solar = $15,614
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 7 years = $15,049
Seven-year savings (assuming array meets 100% of electricity needs) = $15,049
Solar payback period = just over 7 years.
Assuming a 7.1% inflation rate and average energy use and costs but a larger array and no rebates
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
State tax credit (25%, to $5,000 maximum) = $5,000
Subtotal = $22,305.20
Federal tax credit of 30% = $6,691.56
Net cost of solar = $15,614
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 7 years = $17,361
Seven-year savings (assuming array meets 100% of electricity needs) = $17,361
Solar payback period = just 6-7 years.
Even without utility rebates, homeowners who install a solar array sized to meet 100 percent of their energy needs can still pay off the upfront cost in as little as 5-6 years!
What if you don’t qualify for state and federal tax credits, though? Say, if you’re retired and have a low annual income.
Does home solar make sense in NY state if I’m retired?
Let’s assume you’re a homeowner interested in rooftop solar but you’re living on savings and your low annual income means you won’t benefit from the state and federal tax credits in NY.
Your solar payback period might look a little more like the following:
At 2.4% inflation, for a smaller array, with utility rebates
Gross cost of a 5 kW solar array = $3.56/Watt x 5,000 = $17,800
Utility rebate (at an average of $0.35 per Watt) = $1,750
Net cost of solar = $16,050
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 11 years = $24,839
Eleven-year savings (assuming array meets 65% of electricity needs) = $16,146
Solar payback period = just under 11 years.
At 7.1% inflation, for a smaller array, with utility rebates
Gross cost of a 5 kW solar array = $3.56/Watt x 5,000 = $17,800
Utility rebate (at an average of $0.35 per Watt) = $1,750
Net cost of solar = $16,050
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 9 years = $24,056
Nine-year savings (assuming array meets 65% of electricity needs) = $15,636
Solar payback period = just over 9 years.
At 2.4% inflation, with a larger array
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
Utility rebate (at an average of $0.35 per Watt) = $2,684.50
Net cost of solar = $24,620.70
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 11 years = $24,839
Eleven-year savings (assuming array meets 100% of electricity needs) = $24,839
Solar payback period = just under 11 years.
At 7.1% inflation, with a larger array and rebates
Gross cost of a 7.67 kW solar array = $3.56/Watt x 7,670 kW = $27,305
Utility rebate (at an average of $0.35 per Watt) = $2,684.50
Net cost of solar = $24,620.70
Cost of electricity = $0.2181 per kWh
Average electricity use in New York State = 9,170 kWh per year
Estimated cost of electricity for first 9 years = $24,056
Nine-year savings (assuming array meets 100% of electricity needs) = $24,056
Solar payback period = just over 9 years.
Even if your taxable income is low in NY, meaning you miss out on state and federal personal income tax credits, going solar still pays for itself in 9-11 years on average. This means you could enjoy around 15 years of free electricity within the warranty period of most systems, plus many more outside of that warranty.
Is home solar worth it in NY state?
New York is a fantastic place to go solar in 2023, and adding home solar in the Empire State definitely makes financial sense. Not only does the state provide a sales tax exemption, it also offers a personal tax credit and low-cost solar loans. Homeowners here can also apply for utility rebates and reduce the cost of solar if eligible for the federal tax credit.
Factor in all these incentives, and the very high cost of electricity in NY, and homeowners in the Empire State stand to pay back the cost of going solar in less than 11 years. Some homeowners could break even in just 5 years!
Over the typical 25-year warranty period for most solar panels, residents who go solar in 2023 may save close to $100,000 in electricity costs. If high inflation sticks around for the next few years, those savings could be well over that amount.
Utility bill savings are just one reason for installing rooftop solar, though. Like NY state itself, many homeowners are mostly interested in energy independence, having a backup power source during an outage, and reducing reliance on fossil fuels to help tackle climate change and air pollution.