The federal government killed the 30% Section 25D residential clean energy tax credit in January, and Long Island’s solar industry is still feeling the impact.
That credit covered nearly a third of installation costs for homeowners. Without it, solar panels that were already a tough sell in a high-interest-rate environment got harder to pitch. New York State offers an incentive of up to $5,000, which helped some households during the federal program’s run but doesn’t come close to replacing what Washington pulled back. The result: slower growth, thinner margins, and at least one major company calling it quits.
EmPower Solar is winding down operations, citing the absence of the federal residential tax credit directly. It won’t be the last. Inflation, labor shortages, and rising borrowing costs had already thinned the herd before January’s cutoff. Now some companies are selling at reduced volume and hoping the math still works for homeowners who take a long view on energy costs.
Sometimes it does.
“Other companies out there are selling lower volumes, but still getting homeowners to install solar,” Michael Voltz, director of energy efficiency and renewables for PSEG Long Island, told Long Island Press. “It’s still a good long-term investment. With the price of oil and gas going up, there are some benefits there.”
Voltz also put the current damage in perspective. The credit’s disappearance has slowed things down, he said, but it hasn’t shut the industry down. Just under 100,000 electric accounts across Nassau, Suffolk, and the Rockaways carry solar installations. That’s not a small number, and it represents years of steady residential uptake that won’t vanish overnight simply because Washington changed course.
The capacity numbers from LIPA bear that out. In 2024, LIPA’s service territory held 1,146 megawatts of solar. That figure climbed to 1,239 megawatts in 2025, and reached 1,252 megawatts as of February 2026. Long Island now sits at 96% of LIPA’s 2030 goal of 1,310 megawatts, which is a remarkable position for a region that spent most of the 2010s lagging behind solar-friendly states.
But the forward projections look considerably softer.
Before January’s federal rollback, Long Island had been adding 66 megawatts of residential solar and 30 megawatts of non-residential power annually. LIPA now anticipates that annual residential growth will fall to somewhere between 47 and 55 megawatts, with non-residential additions dropping to 16 to 19 megawatts per year. That’s a real reduction, not a rounding error. Spread that across several years, and Long Island falls significantly short of where it could have been.
“The future trajectory of solar is unclear with the sunset of the federal tax incentive,” a LIPA spokesperson said.
LIPA CEO Carrie Meek Gallagher offered a more forward-facing take. “LIPA is committed to driving the growth of solar energy on Long Island,” Gallagher said. “We are making steady progress with solar projects already in development while establishing strategic partnerships that lay the groundwork for future opportunities.”
Not everyone is retreating. SUNation Energy announced on March 30 that it had installed its 10,000th solar system on Long Island, hitting that milestone over 20 years of operation while providing 130 megawatts of capacity across the Island.
“It’s fitting that we’ve come full-circle and installed number 10,000 for a great family in the place where our deepest roots are,” SUNation CEO Scott Maskin said.
That’s a company that intends to stay in the fight. Others will adapt or shrink their footprints. Some will close.
The broader economic picture doesn’t help residential hesitation. Gasoline and heating oil costs have climbed sharply, which logically should push homeowners toward solar. But installation costs without the federal credit are steep enough that the upfront math stops many Nassau and Suffolk County households before they get to a contract. High property taxes and mortgage rates already put pressure on household budgets across the Island. Adding a five-figure solar installation without a federal offset is a harder ask than it was 18 months ago.
Long Island municipalities are reportedly eyeing local incentives to soften that blow, though NYSERDA’s state programs may provide the most immediate bridge for homeowners trying to bridge the gap left by Washington. The Section 25D credit is gone for now, and with it, a straightforward case for residential solar that the industry spent a decade building.
The 1,252 megawatts already installed on Long Island aren’t going anywhere, and companies like SUNation are proving the business can survive without federal support. The growth rate, though, is a different story.