There is current interest in developing photoactive materials that deform on illumination. The strategy is to develop new photoactive molecules in solution, and then to incorporate these in the solid-state either by crystallization or by inserting them into polymers. This letter shows that the kinetics and the nature of the photo-induced phase transitions are profoundly different in single molecules (solution) and in the solid state using a lattice spin model. In solution, where the molecules act independently, the photoreaction follows first-order kinetics. However, in the solid state where the photoactive molecules interact with each other and therefore behave collectively during reaction, photoreactions follow the sigmoidal kinetics of nucleation and growth as in a first-order phase transition. Further, we find that the exact nature of the photo-induced strain has a critical effect on the kinetics, equilibrium, and microstructure formation. These predictions agree qualitatively with experimental observations, and provide insights for the development of new photoactive materials.