You could be forgiven for thinking that solar panels are pretty cheap.

And they are — especially compared to prices even a decade ago. Not to mention all the money you could save on electricity bills. But that doesn’t change the fact that, if you’re thinking about installing solar, you’ll likely need a chunk of cash for the upfront investment.

But how much, exactly? It depends on how big the solar system is and how exactly you decide to pay for it. The good news is that New York residents can take advantage of some of the most generous tax incentives and rebates in the country, to offset the cost.

Here’s a rundown of how much solar will cost you in New York and what your options are for keeping that cost as low as possible.

Solar panel costs in New York

It’s worth repeating: Every solar installation is unique, so it’s hard to talk about average prices. “It’s a very considerable range,” said Shyam Mehta, the assistant director of distributed energy resources at the New York State Energy Research and Development Authority.

With that in mind, data shows the price per watt for installed solar systems in New York state coming in slightly above the national average.

Factors affecting solar panel price in New York

So why are solar system costs so variable? Mostly because each solar installation is designed specifically to fit your home, which means it will vary in size and scope for each site. Some installations might be a simple array of panels on one side of your roof; others might involve a complex roof structure or add battery storage into the mix. 

On top of that, each solar installer has a slightly different pricing structure with different labor costs. “For the same installation, if you go to different solar contractors, you can get wildly different pricing,” Mehta said. It also matters how you pay for it. “If you bring a loan into it, the cost goes up,” due to interest and fees, Mehta said. 

How to pay for solar panels in New York

You don’t necessarily need $30,000 upfront to invest in solar panels. You can pay with cash if you have it, but you could also access a solar loan, solar lease or power purchase agreement to reduce or altogether eliminate upfront costs.

Cash: Just like buying a car, buying solar panels with cash is the simplest route and the one that will yield the fastest payback period on your solar panel electricity savings. If you want to take this route, consider building up the cash in a high-yield savings account.

Solar loan: Some banks offer loans specifically designed to fund solar installations. Check in with your installer or with lenders to see what the options are. You can also consider a loan directly from NYSERDA, as the state agency offers low-interest-rate loans specifically designed to bridge the gap in solar costs.

Other types of loans: Just like you would for any other home renovation, you can tap your home equity to pay for solar. Leveraging a home equity loan or home equity line of credit (HELOC) to install solar — which increases your home value — can be a solid bet, but watch out for interest and fees. If you’re borrowing against your home’s equity, you could face foreclosure if you can’t pay it back. Other types of loans, like a personal loan, could also work, but be careful of high interest rates or other unfavorable terms.

Lease or power purchase agreement: To minimize (or eliminate) the upfront cost of solar, you could actually lease the system from the installer, like you would a car. Under a power purchase agreement (a close relative of a lease), the developer owns the panels, and sells you the electricity generated at a reduced rate. But be warned: These can be onerous to navigate if you sell your home later.

New York solar panel incentives and rebates

The state of New York has a long list of programs designed to make solar more affordable. “If you take full advantage of all of the incentives, it really significantly brings down that upfront cost, in some cases to zero,” Mehta said.

From tax credits to rebates and net-metering, here’s a look at what’s available for residents.

New York solar panel cost vs. utility electricity

One of the most important questions to ask when you’re deciding whether to invest in solar, is how the cost of solar panels compares to utility electricity rates. These numbers are changing all the time, but we can at least look at some averages. 

As of June 2023, the average electricity rate in New York state was $0.21 per kWh, making for an average monthly bill of $129.56, according to SaveOnEnergy.com (which is owned by CNET’s parent company). The average statewide rate has gone up and down over the past decade, but has been on a steady climb since 2019, when it was $0.18 per kWh.

The cost of solar panels, by comparison, has been steadily dropping for the past 20 years in New York. In 2000, the average solar installation cost $13.9 per watt, while today the average cost is $4.3 per watt, according to the Lawrence Berkeley National Laboratory.

While these numbers will continue to change every year, you can look at the broader patterns (utility rates going up, solar costs going down) to help guide your decision.

How we gathered our cost data

Average cost data we included in this article came from reputable sources, including the Lawrence Berkeley National Laboratory, SaveOnEnergy.com and the New York State Energy Research and Development Authority.

Keep in mind, however, that these are just averages. It’s essential to seek out quotes from at least three solar installers, Mehta recommends, and make sure you understand the terms and true cost of each. “You really want to be digging through those, making sure you know what you’re signing up for,” Mehta said.

New York solar cost FAQs