Solar power: Feds ax credits, localities eye incentives

The federal government, in January, ended a 30% Section 25D residential clean energy tax credit on solar panels, sending costs through the roof. New York State still has a $5,000 incentive at most, a shadow of the federal perk. Inflation, rising interest rates and labor shortages all left Long Island’s solar industry in a virtual eclipse when it seems like it should be at noon.

“It makes it more difficult for the solar developers and industry to sell someone on putting the systems in,” said Michael Voltz, director of energy efficiency and renewables for PSEG Long Island. “While the tax credit has slowed the industry down, it hasn’t completely shut it down.”

There are just under 100,000 electric accounts with solar in Nassau, Suffolk and the Rockaways, he said. 

LIPA said in 2024 there were 1,146 megawatts of solar in its territory, up to 1,239 megawatts in 2025 and 1,252 in February 2026. LIPA, as of February 2026, said its area had reached 96% of its 2030 goal of 1,310 megawatts.

“LIPA is committed to driving the growth of solar energy on Long Island,” LIPA CEO Carrie Meek Gallagher said. “We are making steady progress with solar projects already in development while establishing strategic partnerships that lay the groundwork for future opportunities.”

Without federal incentive, residential solar power installation growth has slowed, with some major companies ending operations.

Long Island has added 66 megawatts of residential solar power and 30 megawatts of non-residential in recent years. Without the federal incentive, LIPA anticipates 47 to 55 megawatts of residential and 16 to 19 of non-residential solar power each year.

“The future trajectory of solar is unclear with the sunset (of the federal tax incentive),” a LIPA spokesperson said. 

EmPower Solar is winding down its business, citing the absence of the federal residential tax credit, although some companies say they can navigate without it.

“Other companies out there are selling lower volumes, but still getting homeowners to install solar,” Voltz said. “It’s still a good long-term investment. With the price of oil and gas going up, there are some benefits there.”

SUNation Energy on March 30, for instance, said it had installed its 10,000th solar power system over 20 years on Long Island, providing 130 megawatts.

“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.

And certain municipalities touted solar energy, despite the end of the federal incentive.  

“Islip has always recognized the important role that solar plays in Long Island’s energy future,” Islip Town Supervisor Angie Carpenter said.

Still, some companies focusing on servicing solar panels are virtually on fire. Gina Farese, owner and CEO of West Babylon-based Marcor Solar and Marcor Construction, said her company is flourishing.

“It’s a matter of structuring yourself the right way,” Farese said. “The reason a lot of companies are going out of business is they built their business around the tax credit.”

EmPower Solar named Marcorits the preferred, certified provider for maintenance and repair of EmPower-installed systems. Marcor also hired more than 15 EmPower employees.

“We have the experience, certifications, and infrastructure in place to support these systems,” Farese said.

While servicing work is strong, Farese said financing issues as well as the end of the federal credit are hampering installations.

“High interest rates are making financing difficult,” Farese said. “Customer acquisition costs are going up. Delays in getting funding cause cash flow issues.”

Tariffs, Customs problems and supply chain issues also are holding back new solar sales, she added. 

“We had an issue getting panels,” Farese said. “Things were being held in Customs.”

She believes installers, before the federal incentive was removed, saw an increase in business before the lull. 

“Everyone was fighting over who could get more deals. You can only get so much done in a day,” Farese said. “Companies fought for labor.” 

SUNation Energy reported strong fourth quarter 2025 sales of $27.2 million, up 77% from $15.4 million a year ago, with total annual 2025 sales of  $71.9 million, up 26% from $56.9 million the prior year.

SUNation also reported $2.6 million net income, compared to a net loss of $6.8 million in the prior fourth quarter. It, however, took a $10.9 million 2025 loss, “indicating ongoing financial challenges,” still better than a $15.9 million loss the prior year.

SUNation, as it reported its fourth quarter earnings, also said the “tax credit is expected to impact first-quarter revenue, potentially leading to a decline.”

Farese sees servicing solar panels as a good business model as she picks up business from other companies.

“I think a lot of people are pivoting to service work. Not a lot of companies are set up with tie infrastructure to do it,” Farese said. “Some big companies need big margins. I can sustain thinner margins.”

While residents can’t qualify for the federal incentive if they buy panels, if they lease, developers can qualify, lowering costs. “Some homeowners don’t want a third party owning something on their roof,” Voltz noted. 

Meanwhile, government and utilities are looking at ways to help the local solar power industry while encouraging solar installations.

“LIPA understands that the solar industry is experiencing headwinds now due to changes in federal tax incentives,” a LIPA spokesperson said, noting they and PSEG Long Island are looking at local incentives and other ways to ease solar.

Volt said officials in various towns have different permitting processes. “We could work with towns to streamline,” he said.

PSEG Long Island is considering reinstating incentives it eliminated over a decade ago. “We haven’t determined how much or whether,” Voltz said. “That’s under consideration.”

While residents lost the federal credit, federal tax credits are in effect for commercial solar power. And PSEG Long Island’s net metering regulations let residents benefit from solar. “They can produce more than they use, put it in a bank, and take that out in later months,” Voltz said.

He said PSEG Long Island, LIPA and solar industry trade groups are hoping to find ways to boost solar power. “We support clean energy,” Voltz continued. “We want to support the solar industry.”