Energy Incentives for New York Buildings

Building owners across New York, including New York City, have access to federal, state, utility, and local incentive programs that can reduce the cost of energy upgrades.

These incentives apply to projects such as heating system electrification, building envelope improvements, lighting retrofits, and renewable energy systems. In New York City, they are often evaluated alongside Local Law 97 compliance and capital planning.

Program availability, eligibility, and funding change frequently. Incentives should be confirmed based on project scope and timing.

What Energy Incentives Are Available in New York?

Energy incentives in New York come from multiple levels of government, as well as utility-administered programs. These generally fall into four categories:

• Federal tax credits and deductions
• New York State programs
• Local programs (including NYC incentives)
• Utility-administered rebates and programs

Many projects combine multiple incentives.

Federal Energy Incentives

Residential Clean Energy Credit (25D)

Provides a federal tax credit of up to 30% of eligible costs for:

• Solar photovoltaic (PV) systems
• Solar thermal systems
• Geothermal heat pumps
• Battery storage

Available for systems placed in service through December 31, 2025. Confirm current IRS guidance when planning projects. Learn more: https://www.irs.gov/credits-deductions/residential-clean-energy-credit

Energy-Efficient Commercial Buildings Deduction (Section 179D)

Provides a federal tax deduction for energy-efficient upgrades to:

• Lighting systems
• HVAC systems
• Building envelope

The deduction is based on modeled energy savings and applicable labor requirements.

Under current federal law and IRS guidance, applies to projects where construction begins on or before June 30, 2026. Learn more: https://www.irs.gov/credits-deductions/energy-efficient-commercial-buildings-deduction

New York State and Local Incentives

NYS Clean Heat Program

Provides incentives for:

• Heat pump systems
• Electrification of heating and cooling

Administered through utilities. Incentives vary by system type and building conditions. Learn more: https://cleanheat.ny.gov

EmPower+

Provides no-cost or reduced-cost energy efficiency upgrades for income-eligible households, including:

• Insulation
• Air sealing
• Appliance upgrades

Learn more: https://www.nyserda.ny.gov/All-Programs/EmPower-New-York-Program

New York State Clean Heating Fuel Credit

Provides a tax credit for biodiesel heating fuel.

Applies to qualifying purchases through January 1, 2029. Credit varies based on blend percentage. Learn more: https://www.tax.ny.gov/pit/credits/clean_heating_fuel_credit.htm

NYC Solar Tax Abatement

Available for buildings in New York City installing solar PV systems.

• Calculated as a percentage of system cost
• Applied over multiple years
• Subject to caps and filing requirements

Recent updates have changed the structure and calculation of the abatement. Confirm current rates and requirements with NYC Department of Finance and DOB. Learn more: https://www.nyc.gov/site/finance/property/landlords-solar-roof.page

NYC Accelerator

A New York City program that provides:

• Local Law 97 compliance support
• Guidance on energy upgrades
• Identification of incentives and financing

Participation is free. Learn more: https://accelerator.nyc

PACE Financing (NYC)

Allows building owners to finance energy upgrades through a property tax assessment.

• Long-term repayment
• Transfers with property ownership
• Applicable to energy and water improvements

Learn more: https://accelerator.nyc/resources/finance/PACE

Utility Incentives (New York)

Con Edison Energy Efficiency Programs

Provide incentives for energy efficiency upgrades in multifamily buildings, including:

• Lighting and controls
• HVAC systems
• Building system improvements

Incentives vary by project scope and building type. Learn more: https://www.coned.com/en/save-money/rebates-incentives-tax-credits/rebates-incentives-for-multifamily-customers

Affordable Multifamily Energy Efficiency Program (AMEEP)

Provides incentives for affordable housing upgrades.

• Tiered incentive structure
• May reach approximately $2,200 per dwelling unit
• Based on project scope and measures implemented

Learn more: https://www.coned.com/en/save-money/rebates-incentives-tax-credits/rebates-incentives-for-multifamily-customers/affordable-buildings

Con Edison Neighborhood Programs

Offer enhanced incentives in targeted areas with high grid demand. Programs are location-specific and currently focused on areas such as Southeast Queens.

Eligibility depends on building location and current program availability. Learn more: https://www.coned.com/en/save-money/rebates-incentives-tax-credits/rebates-incentives-for-multifamily-customers/multifamily-neighborhood-program

Financing Options for Energy Projects

NYCEEC Financing

Provides financing for energy and decarbonization projects in multifamily and commercial buildings.

Includes:

• Predevelopment funding
• Construction financing
• Permanent loans

Learn more: https://nyceec.com

How Energy Incentives Work Together

Many energy incentive programs in New York can be combined within a single project:

• Utility incentives reduce upfront costs
• Tax credits and abatements improve project economics
• Financing spreads capital costs over time

In New York City, this is often coordinated with Local Law 97 compliance and capital improvement planning.

When to Evaluate Energy Incentives

Energy incentives should be evaluated:

• Before starting design
• When planning major repairs or system upgrades
• When assessing energy performance or compliance requirements

Early evaluation can influence system selection, project scope, and overall cost.

Next Steps for Building Owners

Energy incentives depend on building type, systems, and timing.

A building-specific review can identify:

• Applicable incentives
• Potential savings
• Coordination with compliance requirements

RAND evaluates buildings and outlines practical pathways for energy upgrades, incentive use, and compliance planning.