New York Solar, Heat Pump and EV Charger Tax Credits in 2026

Federal credits that have ended

The One Big Beautiful Bill Act, signed July 4, 2025, moved up the end dates of several energy provisions. The IRS has published the termination rules (opens an external site) in the table below.

We are contractors, not tax advisors. What follows explains how project scope, timing and paperwork affect what you can discuss with your tax professional. It is not tax, legal or accounting advice. Tax rules change and depend on your situation. Before you make decisions, consult a CPA. Outstanding Construction does not prepare tax returns and is not responsible for any tax position you take. The information below was checked against IRS, New York State and New York City sources in October 2026.

Systems paid for in 2025 and completed in 2026

For Section 25D, the IRS treats an expenditure as made when the original installation is completed. A system signed and paid for in 2025 but completed in 2026 does not qualify, whatever the dates of the deposit and final payment.

If your installation was finished close to the end of 2025, keep the documents that show when it was completed: the installer's completion certificate, the final electrical inspection and the utility's interconnection approval or permission to operate. The dates often differ, because utility approval at Con Edison or PSEG Long Island can follow completion by several weeks. Your CPA decides which record establishes the completion date.

For EV chargers, equipment placed in service from January 1 to June 30, 2026 in an eligible census tract may still be claimed on the 2026 return using Form 8911. Ask your CPA whether your address and dates qualify.

New York State solar equipment credit

• The credit equals 25% of qualified solar energy system equipment expenditures, limited to $5,000, and is claimed on Form IT-255 (opens an external site).
• The system must be installed and used at your principal residence in New York State.
• Purchased systems qualify, as do written leases and written power purchase agreements that run at least ten years.
• The credit is not refundable, but any amount above your tax due can be carried over for up to five years.
• For co-ops and condominiums, the IT-255 instructions allow the building's qualifying cost to be allocated to units, and systems purchased by the co-op or condominium management are limited to 50 kilowatts. Ask the board or managing agent for an allocation letter early; one is rarely prepared unless requested.
• The instructions exclude expenditures paid with nontaxable government grants and financing charges. Ask your CPA how any incentive you received affects the amount.

Sales tax and property tax benefits

Residential solar energy systems equipment and its installation are exempt from the 4% New York State sales tax and the Metropolitan Commuter Transportation District tax under Tax Law section 1115(ee) (opens an external site). Local sales tax depends on the jurisdiction; Publication 718-S lists the local rates. Homeowners and landlords claim the exemption by giving the contractor Form ST-121. Commercial solar energy systems equipment and its installation have a separate exemption under Tax Law section 1115(ii), also from the state and MCTD tax, with the local portion depending on whether the city or county has adopted it. The commercial purchaser also gives the contractor Form ST-121.

In New York City, the solar electric generating system abatement (opens an external site) for systems with a service start date from January 1, 2024 through January 1, 2035 equals 7.5% of the installation cost per year for four years. Each year's benefit is limited to the lowest of that amount, the annual property tax or $62,500. The city's fact sheet states that the abatement covers solar panels, battery storage or both. It is available to tax class 1, 2 and 4 properties; properties receiving ICAP, 421-a, 421-b or 421-g benefits or paying PILOTs are not eligible, which rules out many newer condominiums. The Department of Buildings determines eligibility, and the Department of Finance applies the abatement from July 1 after approval. The installation company files the application with the building permit and a final cost affidavit at closeout. Applications must be received by March 15 for the abatement to take effect that year, and the eligible cost excludes finance charges and any amount paid with a grant such as NY-Sun.

On Long Island and elsewhere outside the city, Real Property Tax Law section 487 provides a 15-year exemption from the increase in assessed value caused by a solar system, unless the county, town or school district has opted out. Confirm the current status with your local assessor before counting on it.

Heat pumps, batteries, EV chargers and commercial property

• Heat pumps: no federal homeowner credit applies to systems placed in service in 2026. Utility programs such as NYS Clean Heat through Con Edison and PSEG Long Island have offered rebates; terms change during the year, so check them before signing a contract.
• Battery storage: a battery installed without solar no longer has a federal homeowner credit. In New York City it may fall under the solar and storage abatement, subject to DOB approval.
• EV chargers: the Section 30C credit is not available for equipment placed in service after June 30, 2026. New York State's alternative fuels and electric vehicle recharging property credit (opens an external site) remains for chargers used 50% or more in a trade or business in the State: the lesser of 50% of the cost, including installation labor and net of grant funding, or $5,000 per charging station, claimed on Form IT-637 or CT-637 for tax years through 2028. It is not refundable, and unused credit carries forward. A charger used only for personal driving does not qualify.
• Leases and power purchase agreements: the company that owns the system may be subject to different federal rules than a homeowner. We cannot speak to that company's tax position; ask the provider and your CPA how it affects your agreement.

For business and investment property, depreciation now matters more than credits. Federal law restored 100% bonus depreciation for qualified property acquired after January 19, 2025, and Section 179 can apply to certain nonresidential roofs, HVAC, fire protection, alarm and security systems. Projects relying on Section 179D or Section 45L should confirm with their CPA when construction began or when the home was acquired, since the June 30, 2026 cut-off dates are already past. We do not perform 179D energy modeling or certification; that work requires a qualified engineer. For a commercial or third-party-owned solar system that had not begun construction by July 4, 2026 (opens an external site), the federal Section 48E credit requires the system to be placed in service by December 31, 2027, and sourcing restrictions apply; confirm the schedule with your CPA before relying on it.

Documents to keep

• The signed contract and any change orders
• Invoices that show equipment, labor and permit costs separately
• Equipment specification sheets for panels, inverters, batteries, heat pumps and chargers
• DOB or town permits, inspection results and sign-offs
• The utility's interconnection approval and permission-to-operate letter
• Records of any grants, rebates or incentives received
• Form 5695 for every year you claimed a federal residential energy credit (Section 25C or 25D); the credit reduces your home's cost basis, so you will need it when you sell.
• For co-op and condominium owners, the board's cost allocation letter

Our solar, battery, heat pump and EV charger proposals list equipment, labor and permit costs separately, which is how Form IT-255 and your CPA need them, and they do not count incentives we cannot confirm for your property. Electrical work is performed with our licensed partner electricians. For tax questions, consult your CPA.