Are Solar Panels Worth It in New York?

7 factors to consider before getting solar panels in New York

Solar panels are generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before you make the switch.

1. Solar panel installation costs

2. How much you can save

3. New York solar incentives

4. Net metering buyback rates

5. How long you stay in your house

6. The solar company you hire

7. How you pay

1. Solar panel installation costs

With professional installation, a 9-kilowatt solar panel system in New York costs$24,840. That doesn’t include a solar battery, which can add $7,000 to $18,000 to your total system costs.

Most installers set the price according to the system’s wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In New York, the average cost per watt is $2.76.

New York’s average solar panel costs by system size

How do I know what system size I need?

Check your utility bills from the past 12 months and add up your total electricity use in kilowatt-hours (kWh). A solar installer can use that number to estimate the system size you need and how much of your electric bill solar could offset.

From there, you can calculate your potential savings and the time it should take for your solar installation to pay for itself. In New York, solar panels usually pay for themselves within 7.4 years.

A typical New York household needs a 12.24 kW solar system to produce as much electricity as it uses over the course of a year. Your system could be larger or smaller depending on how much electricity you use, your roof and how much sunlight it gets.

2. How much you can save

Over 25 years, New York homeowners with solar panels can avoid approximately $71,770 in total utility costs. Your actual savings depend on how much electricity you use, local rates, your system size, financing costs and how much solar power your home can produce.

The biggest thing to compare is what you pay for solar each month versus what you would otherwise pay your utility. Savings can also change by season, especially in New York.

Some customers told us their bills stayed higher than expected even after going solar:

• Pierre in Queens Village said that after eight years, his bills still vary significantly by season: “I pay $23. During winter, it would jump to $290 to $300. There is a big discrepancy there.”

• Chris in Oceanside, who has had panels for more than a decade, said: “I purchased my panels 12 years ago. My electric bills on an average are $450 with the solar panels. I have never gotten a refund or credit in my energy bank.”

Others see much bigger savings. Luigi in Staten Island said his electric bill initially dropped to $0 after going solar, although Con Edison now charges him about $26 to $29 a month. He also said he has built up as much as $400 in bill credits from excess solar production.

Before you sign, ask what the system should produce, what your utility bill could look like and what you’ll pay for solar each month. That gives you a better sense of whether you’ll actually save money.

3. New York solar incentives

The 30% federal solar tax credit is no longer available, but New York still offers several ways to lower the cost of going solar. Homeowners may qualify for a state tax credit worth 25% of eligible costs, up to $5,000, along with sales and property tax exemptions. New York State Energy Research and Development Authority (NYSERDA) also offers financing and NY-Sun incentives, depending on where you live.

» MORE: Solar incentives in New York

4. Net metering and solar credits

Net metering lets you earn bill credits for extra solar power you send to the grid. In New York, any excess generation you produce during the month can roll over as a credit on your next electric bill.

It’s a good deal, but don’t expect your bill to ever be $0. In the best-case scenario, you only pay relatively small utility charges, like Joseph in Amagansett, who went solar a few years ago. “My electric utility bill is now just fees and taxes, no grid consumption,” he told us.

Currently, the value of extra power you send to the grid can vary depending on your utility and when that power is produced. Newer systems may also have a small monthly Customer Benefit Contribution (CBC), which slightly reduces your overall savings.

5. How long you plan to stay in your house

Solar panel installations can be expensive, and it takes years for electric bill savings to make up for the initial cost. Solar panels typically pay for themselves within 7.4 years in New York. If you sell your home before then, you might not fully realize the financial benefits of your investment.

It’s true that solar panels can increase the value of your home. But they can also complicate a sale. This is especially true if you lease your system, since the buyer may need to take over the contract.

If you think you’ll move in the next couple of years, you may want to consider a home improvement project with a better return on investment, like a kitchen or bathroom remodel.

6. The solar company you hire

We’ve heard from more than 500 solar energy customers in New York. Many are satisfied with the installation process and the savings they see on their electric bills. However, there are also negative reviews that mention installation delays, issues with permits and problems with the panels or system equipment.

In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NLR’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

7. How you pay

It can be financially strategic to pay for the whole thing upfront. You own the system from day one, plus you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

• Solar loans work like any other type of home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.

• Leasing solar panels lets you set up a system without the high upfront costs. Monthly payments usually range $150 to $250. Agreements last 20 to 25 years.

• Power purchase agreementsare similar to solar leases. Instead of buying the panels, you agree to buy the electricity they produce at a set rate. The solar company owns and maintains the system, and contracts typically last 10 to 25 years.

» SOLAR PANELS: Lease vs. buy

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. The state only gets 3 to 3.5 peak sun hours daily. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
• What is the size and angle of your roof? New York (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last 25 to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.
• How old are your appliances? The first step is to ensure that your electrical loads are as small as possible. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels.

Pros and cons of solar panels in New York

Solar can reduce your exposure to utility-rate increases, but customers may still pay fixed charges, CBC charges, financing costs or grid electricity purchases.

Benefits of solar panels in New York

Solar power is a renewable energy source that does not produce greenhouse gas emissions or other pollutants. They also require little maintenance and can increase the property value of homes.

• Cheaper energy bills: New York has relatively high electricity prices. Going solar now means that your monthly energy expenses will be more predictable (and often lower). Solar panels can also reduce your exposure to future utility rate increases.

• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.

• Higher home resale value: Installing solar panels can increase a home’s value. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.

• More energy independence: Solar panels paired with battery storage work especially well in areas prone to power outages.

Drawbacks of solar panels in New York

The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Then, since solar panels do not generate electricity at night, you need to pull power from the grid or get a storage battery to keep your lights on.

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. A battery may become more valuable if compensation for excess solar power declines, since it lets you store more of the energy you produce for later use.

• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.

• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Heavy snowfall that’s common in the state can also damage solar systems.

• Could make your house harder to sell: Solar panels can make a home harder to sell if they’re leased or financed, since the buyer may have to take over the agreement. Some buyers may also worry about roof repairs, maintenance or whether the system will actually save them money.

» MORE: Solar energy pros and cons

Find solar companies in New York

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in New York to learn more.

FAQ

Bottom line: Is going solar in New York worth it for you?

For a lot of homeowners, solar panels are worth it as long as their cost savings over time outweigh the initial investment. It costs about$33,782 for solar panels that last 25 years. Over that same time period, New York homeowners with solar panels can avoid about $71,770 in total utility power costs.

Others are happy to go solar for the environmental benefits alone. The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in New York and the average solar costs in other states.

Solar costs vs. savings: New York and nearby states