Energy efficiency program hit by state, federal budget cuts

The budget for New York’s flagship energy-efficiency program will be cut by more than 60 percent over the next two years, from roughly $220 million this year to $80 million in 2027, state officials told a group of contractors on July 11. 

• (Empire) State of play: The program, called Empower+, provides up to $24,000 to help low- to moderate-income households make energy-efficient upgrades, including insulation and new heat pumps. 

What’s happening: Empower+ administrators in mid-July said that state and federal budget cuts are forcing the agency to scale back the program, and that contractors can no longer sign up new customers while it reviews how to direct existing funds, news site New York Focus reported. 

• “That will naturally slow the program down big time,” said Hal Smith, CEO of Halco Home Solutions, noting that the cuts are particularly hard to stomach considering the state has been pushing for “more, more, more” in recent years. 
• “Now, [they’re] saying we have to put on the brakes,” he added. 

Zoom out: The move comes just months after a similar decision in Massachusetts, in which the state’s popular energy program, Mass Save, had its budget cut by $500 million through 2027 — though it remains above $4 billion. 

• Why it matters: Federal funds to state energy programs often flow through the Department of Energy and the EPA, which face a proposed nine and 54 percent budget cut, respectively, for fiscal 2026. 

The big picture: Both New York and Massachusetts’ cuts coincide with the Trump administration’s decision to eliminate a pair of federal, HVAC-focused tax credits as part of the ‘big, beautiful bill’ signed on July 4.

• Energy Star and LIHEAP, another low-income, HVAC-focused program, have also been floated for possible elimination, though both programs remain active.

The logic: The Trump administration has argued that the president’s energy policies, including increasing fossil fuel production, will bring down energy prices across the board, making many subsidies unnecessary. 

What to watch: While new Empower+ applications have been halted, New York state officials said they’re looking for “alternate sources of funding,” New York Focus added. 

• “Utility costs are a huge burden on families,” said Governor Kathy Hochul, “and I’ll do whatever I can to really alleviate that.”
• It remains unclear whether other states plan to make similar budget adjustments, and the Department of Energy didn’t return a request for comment.