Thanks. It does feel that this has something to do with Coned wanted solar on peoples roofs for its own benefit to help them generate more electricity so that is why they give a bunch of rebates and incentives and tell people it's prohibited to use the battery storage because that will give them nothing.
Currently you cannot install a Powerwall in the 'City', long island is fine.
Had a rep come out for a solar estimate today and we discussed the Powerwall; according to him the issue originally was with the FDNY, which was blocking the installation in the 'city' - then the FDNY allowed it, requiring Powerwall installs to have an additional firewall between the battery and the wall when installing - and now, Tesla is refusing to agree to this, presumably because this requirement assumes the battery is not 'safe' to mount, as is currently being mounted all over the country (sounds weird to me but OK).
Not sure how accurate the reasons I was given but... I'm happy to install any additional safety measures.
Attached is a chat with a local solar installer and their response which points at the FDNY for the reason. Waiting for a Tesla rep to get back to me as well.