In 2025, it’s not trade wars business owners should be worried about—but shifting incentives that are rewriting the rules of the solar game. From the reduction in various state programs to evolving federal policies and a scramble for remaining funding, the solar landscape is anything but predictable these days. For commercial property owners and businesses, staying ahead means understanding not just where the sun shines brightest, but where the dollars go, too. Here are the four biggest changes to incentive programs in New York and Massachusetts for commercial solar this year, and what you need to know in order to stay plugged in.
NY-Sun Program Blocks Are Filling Up
- New York’s NY-Sun incentive, a major driver for commercial (and residential) solar adoption brought to you by the New York State Energy Research and Development Authority (NYSERDA), and its blocks are filling up. Long Island has already lost its incentive, and the Con Edison and upstate regions are next. This process was planned as the market matured, but it means higher upfront costs for new projects and reduced financial support for businesses considering solar. NYSEIA (New York Solar Energy Industries Association) has also publicly stated that recent changes to NY-Sun funding and state policy are harming the expansion of solar in New York.
Federal Solar Tax Credits Remain, But Uncertainty Looms
- The 30% federal Investment Tax Credit (ITC) remains in place through at least 2032, thanks to the Inflation Reduction Act (IRA). Commercial projects can also qualify for up to 20% in bonus credits by meeting domestic content or energy community requirements, potentially covering up to 50% of project costs.
- However, recent policy shifts, including an executive order pausing IRA funding for renewable projects, have introduced uncertainty. While the tax credit itself is safe for now, other grants and loans are at risk.
Our CEO, Gabe Phillips, recently explored this topic in a LinkedIn article, highlighting the growing bipartisan support for the IRA following a letter of endorsement from 26 Republican lawmakers. The conversation around this issue continues to gain momentum. Read Gabe’s article here.
IRA Brings New Opportunities, But Also New Challenges
The IRA has historically expanded incentives for commercial solar. Navigating these incentives requires careful planning, especially as supply chain and domestic content requirements become more strict. Below are a few changes that have occurred:
- Bonus credits, otherwise known as the domestic content bonus credit, are for projects using U.S.-made technology like battery energy storage or located in designated “energy communities.” Energy communities look like brownfield sites, certain metropolitan areas, or census tracts where a coal mine closed after 1999 or where a coal-fired power plant was retired after 2009.
- Tax credits for standalone battery storage, which began in 2023, allow businesses to enhance energy resilience and reduce demand charges.
State-Level Responses
Let’s break down some additional changes for New York and see how Massachusetts is responding to current shifts in commercial solar:
- New York: While the NY-Sun program has not received new funding at this time, the state continues to support solar through ambitious targets (10 GW by 2030) and other policies, but the loss of direct incentives will make projects less attractive financially.
- Massachusetts: Continues to offer the SMART program, which provides long-term, performance-based incentives for commercial solar. However, the incentive structure within the SMART program has been steadily declining as the program matures, making it more important than ever for businesses to act quickly to secure the most favorable rates. Currently, SMART remains the primary state-level incentive for commercial solar in Massachusetts.
Act Now to Maximize Savings
The commercial solar market in 2025 is defined by a race against time: amid federal uncertainty, many businesses are turning to local programs for support, though these, too, are evolving and facing their own set of challenges. Businesses in states like New York and Massachusetts should move quickly to lock in available incentives. Catalyst Power® can help. Strategic planning is essential to navigate the evolving landscape, and through our suite of energy solutions, we can help your business capture the best possible return on investment.
