A solar contract signed or paid for in 2025 didn’t preserve the former federal credit if the system was completed in 2026. For the Section 25D Residential Clean Energy Credit, the installation completion date determined when the expenditure was made, not the contract, deposit, or loan date.
For Hudson Valley homeowners, that change removed one benefit without erasing the other financial factors behind a solar decision. Drawing on our work throughout the Hudson Valley since 2009, we explain how New York incentives, utility savings, ownership, and financing affect the cost of a 2026 project.
The Federal Homeowner Credit Ended for Systems Completed After 2025
The One Big Beautiful Bill Act ended the 30% Section 25D credit for homeowner-purchased solar and battery systems completed after December 31, 2025. The law provided no phase-down or transition rule.
For a cash purchase or solar loan, installation had to be completed by December 31, 2025, for the former federal credit to apply. A system ordered, financed, or partly paid for in 2025 but installed in 2026 doesn’t qualify.
Homeowners with an older qualifying project face a different rule. Unused credit from a system completed in 2025 or earlier can carry forward against future federal tax owed. It’s claimed using IRS Form 5695, subject to the homeowner’s available tax liability.
New York Benefits Still Affect the Project Price
New York incentives didn’t end with the federal homeowner credit. Because they work differently, homeowners should distinguish a tax credit claimed after installation from an upfront program incentive reflected in the project price.
New York Solar Tax Credit
The Solar Energy System Equipment Credit equals 25% of qualified solar equipment expenditures, up to $5,000. It’s nonrefundable, so it offsets income tax owed rather than producing a payment beyond that liability. Eligible homeowners claim it on Form IT-255.
Unused state credit can carry forward for up to five years. Whether a household can use the full amount depends on its income-tax liability during that period. A qualified tax professional can address questions about individual eligibility, tax liability, and carryforward rules.
NY-Sun Incentive
NY-Sun is a New York State Energy Research and Development Authority program that applies a per-watt incentive directly to an eligible project’s price. It isn’t a rebate check sent after installation. Rates and availability vary by utility territory and decline as program blocks fill, so a proposal should confirm whether an incentive is currently available and show how it affects the installed price.
Residential solar-energy systems are also exempt from New York State sales and use tax on the sale and installation. These benefits remain part of the financial picture for Hudson Valley homeowners despite the loss of the former federal credit.
Ownership, Loans, Leases & PPAs Have Different Tax Results
How a system is financed determines who owns it, who claims available tax benefits, and what the homeowner pays over time. A proposal should make that structure clear before comparing a monthly payment with a projected electric bill.
Buying with Cash or a Loan
Homeowners who purchase a system with cash or a loan own the equipment. A system completed after December 31, 2025, doesn’t qualify for the former federal homeowner credit. Eligible purchasers can still evaluate the state equipment credit, sales-tax exemption, NY-Sun pricing, and the expected value of the electricity the system will produce.
A loan doesn’t reduce the installed price by itself. Compare the monthly payment with the total amount paid over the full term, including interest and applicable fees. A longer term can lower the payment while increasing the total financing cost.
Solar Leases & Power Purchase Agreements
With a solar lease, a third party owns the system and the homeowner makes scheduled lease payments. With a power purchase agreement, or PPA, the third party also owns the system, while the homeowner pays for the electricity it produces at the agreement’s stated rate.
The third-party owner may qualify for the Section 48E commercial clean electricity credit if the project meets the law’s timing requirements. That isn’t the same as a homeowner receiving Section 25D, and any effect on lease or PPA pricing depends on the written agreement.
The state equipment credit can apply to qualifying leased equipment under a written agreement that runs for at least 10 years. If the agreement exceeds 15 years, payments made after year 15 don’t qualify for the credit.
Before accepting a lease or PPA, review these terms in writing:
- The payment schedule and any annual escalator.
- The agreement length, transfer process if the home is sold, and end-of-term options.
- The estimated production and how the electricity price compares with utility charges.
Evaluate a 2026 Proposal on Its Full Cash Flow
Without the former federal credit, a useful solar comparison starts with the complete cost and benefit picture, not a single percentage. Roof condition, shading, household electricity use, system design, utility rates, and financing terms all affect whether a system’s economics fit a particular home.
Ask for a proposal that separates the figures instead of blending them into one claimed savings number:
- The installed system price before and after any NY-Sun incentive.
- The estimated New York Solar Energy System Equipment Credit and whether the household expects to use it.
- The financing payment, interest rate, term, and total loan cost, or the payment schedule for a lease or PPA.
- The expected annual electricity production and projected change in utility purchases.
- The equipment, warranties, monitoring, and any battery-storage costs included in the design.
Ask which assumptions drive the electricity-bill estimate. A production estimate is based on the site and system design, while the dollar value of that production depends on future household usage and utility rates. Those figures are related, but they aren’t interchangeable.
When comparing Hudson Valley proposals, don’t treat the state credit as an immediate price reduction. NY-Sun is reflected in eligible project pricing, while the credit is claimed on a state return. Keeping those items separate makes proposals easier to compare fairly.
Plan Around Design, Incentives & Financing
A sound design begins with the home’s electricity use and site conditions, then considers whether roof-mounted or ground-mounted solar is the better fit. We provide grid-tied and solar plus storage systems, so the discussion can also account for whether a household wants battery backup as part of its energy plan.
Financing should be reviewed alongside design, not added after the equipment decision. We can discuss ownership and available financing structures, including New York State Energy Research and Development Authority Green Jobs Green New York solar loans with reduced interest rates for eligible residents. Homeowners should consult a qualified tax professional about individual federal and New York tax eligibility, tax liability, and credit carryforward questions.
For a 2026 comparison, put the installed price, applicable incentives, usable tax credit, financing payment, and expected electricity-bill impact on the same page. To compare grid-tied and solar plus storage options, call Lighthouse Solar at (845) 251-2012.