As the U.S. housing market grapples with affordability challenges and wavering consumer confidence, proposed rollbacks to clean energy incentives threaten to exacerbate industry instability.
The U.S. housing market is navigating a complex landscape in 2025, marked by affordability constraints, elevated mortgage rates, and shifting consumer sentiment. In the face of a muted spring selling season, builders are being compelled to continue offering incentives and price adjustments to stimulate demand.
Concurrently, the proposed "One Big Beautiful Bill" (OBBB) aims to dismantle key provisions of the Inflation Reduction Act (IRA), including the elimination of the 30% Investment Tax Credit (ITC) and Production Tax Credit (PTC) for renewable energy projects.
The bill also seeks to terminate the 25D residential solar tax credit by the end of 2025 and impose supply chain restrictions on materials from "foreign entities of concern." These policy shifts could have profound implications for the housing industry.
Economic Impact
The IRA has been instrumental in propelling over $500 billion in clean energy investments, fostering job creation, and advancing renewable energy deployment. Rolling back these incentives may lead to increased energy costs for homeowners, with projections indicating a potential 7% rise in household energy expenses.
Economic analysts have expressed concern over the potential economic repercussions, warning that the OBBB could result in the loss of over 830,000 jobs by 2030, particularly within the renewable energy sector. Moreover, the abrupt policy changes have already caused significant market volatility, with solar company stocks experiencing sharp declines.
The housing market’s current fragility amplifies the risks associated with undermining clean energy incentives. Builders are already contending with affordability challenges, as housing affordability remains at its worst level in 30 years. The elimination of energy-efficiency incentives could further strain homebuyers, particularly in entry-level and move-up segments, by removing cost-saving measures that help offset rising interest rates and construction costs.
For builders and developers, the repeal of tax credits under the IRA could result in higher construction and operational costs for high-performance homes. The IRA has helped defray the costs of clean technologies like solar panels, battery storage, electric heat pumps, smart panels, and energy-efficient HVAC systems.
Without these incentives, projects that once penciled out financially may no longer be viable, especially in cost-sensitive markets where affordability is already a major challenge.
Moreover, the proposed early expiration of the 25D residential solar tax credit could significantly reduce homeowner demand for rooftop solar systems—one of the most visible and widely adopted features of net-zero energy homes.
Builders who have positioned their product lines around solar-equipped, all-electric, or Zero Energy Ready Home (ZERH) certification may face a sudden mismatch between consumer expectations and cost realities.
For manufacturers of energy-efficient building products and clean technologies, the outlook is equally precarious. The IRA catalyzed more than $500 billion in announced investments, leading to expanded domestic production capacity for solar panels, heat pumps, high-performance windows, battery systems, and smart home energy devices. A rollback could destabilize this growth trajectory, prompt layoffs, freeze planned expansions, and dampen investor confidence.
Supply chain complexity is another concern. The OBBB could disrupt access to critical components, such as polysilicon for solar modules or rare earth minerals for battery systems, leading to production delays and cost inflation.
Furthermore, the uncertainty surrounding federal energy policy exacerbates a broader crisis of confidence. Builders are contending with weak consumer demand, elevated interest rates, labor shortages, and tariff pressures. The erosion of clean energy incentives compounds these headwinds, making it more difficult to forecast demand, price homes competitively, and invest in long-term sustainability strategies.
Meanwhile, Across the Pond
While the U.S. debates rolling back clean energy incentives, international competitors are surging forward. In 2023, China invested an astonishing $890 billion in clean energy—more than three times the total global investment in fossil fuels.
The country continues to dominate global supply chains for solar panels, wind turbines, heat pumps, and battery storage technologies, accounting for more than 80% of global solar module production capacity. It’s not just about infrastructure—China is strategically positioning itself to control the future of building materials and technologies that define energy-efficient and climate-resilient homes.
The European Union, meanwhile, has transformed climate policy into industrial strategy. The EU has increased its legally binding emissions reduction target to 55% below 1990 levels by 2030, while pumping investments into green hydrogen, energy storage, and electrified housing infrastructure. European countries are actively leveraging regulatory certainty and public-private partnerships to build out smart cities, low-carbon housing, and sustainable supply chains—all while creating tens of thousands of green jobs and attracting global capital.
For U.S. builders, developers, and manufacturers, this matters enormously. The housing sector doesn’t operate in a vacuum—it is directly influenced by global competition in clean technology, materials pricing, and innovation cycles.
If the U.S. rolls back clean energy support, domestic manufacturers of energy efficiency and electrification products could see declining demand and fewer R&D dollars. This would widen the innovation gap between the U.S. and countries like Germany, Denmark, and China, where government policies are aligned with long-term decarbonization and tech competitiveness.
Additionally, global investors are increasingly looking to place capital in jurisdictions with stable climate policy and strong ESG frameworks. If the U.S. backtracks on clean energy, American builders and developers may lose access to green financing, while global firms aligned with EU or Asian sustainability regulations become more attractive to capital markets.
And, American manufacturers of energy-efficient building materials could lose competitive access to international markets that require compliance with rigorous carbon standards—especially the EU’s Carbon Border Adjustment Mechanism (CBAM), which penalizes carbon-intensive imports. If U.S. firms are not producing low-embodied-carbon goods, they will be priced out of global construction material markets.
Keep Calm and Carry On
Even if federal incentives are reduced or eliminated, long-term energy cost savings, grid resilience, and consumer demand for clean energy remain strong. Builders who continue specifying high performance, healthy, resilient, smart, solar powered homes will win, especially among younger homebuyers where sustainability is a baseline expectation.
Builders and developers who double down on data and messaging will command market attention and surpass their competitors. Those who can effectively communicate the long-term cost savings, indoor air quality improvements, and resilience benefits of sustainable homes will be the ones who maintain consumer confidence—particularly amid policy uncertainty.
And the manufacturers who can support those builders with validated product data, like Environmental Product Declarations (EPDs), will recognize performance advantages in their sales process.
Climate responsive design, green building, sustainability codes and mandates, and clean energy are not passing trends. They are economic and environmental imperatives.
Even if federal support falters temporarily, the long-term direction is clear: building professionals and manufacturers who leverage sustainability to reduce risk, add value, meet buyer demand, augment employee loyalty, and boost profitability will be best positioned to lead in a competitive and rapidly changing market.
About COGNITION Smart Data
COGNITION Smart Data, Green Builder Media’s pioneering suite of market intelligence and data services, uses cutting-edge cognitive learning technology to deliver the insights you need to align products, messaging, and innovation with what homebuyers actually want.
COGNITION is the only market insights platform specifically engineered for the building industry’s sustainability transformation. We track evolving consumer behaviors, emerging technologies, policy shifts, competitive benchmarks, and market demand signals so you can adjust faster, sell smarter, and grow revenue—confidently.
As cofounder and CEO of Green Builder Media, Sara is a visionary thought leader and passionate advocate for sustainability. A former venture capitalist, she has participated in the life cycle (from funding to exit) of over 20 companies, with an emphasis on combining sustainability and profitability. She lives in Lake City, Colo., with her husband, where she is an avid long-distance runner, snowboarder, and Crossfit trainer. She is also on the Board of Directors at Dvele, runs the Rural Segment for Energize Colorado, and is a former County Commissioner.
Policy Rollbacks and Housing Headwinds
As the U.S. housing market grapples with affordability challenges and wavering consumer confidence, proposed rollbacks to clean energy incentives threaten to exacerbate industry instability.
The U.S. housing market is navigating a complex landscape in 2025, marked by affordability constraints, elevated mortgage rates, and shifting consumer sentiment. In the face of a muted spring selling season, builders are being compelled to continue offering incentives and price adjustments to stimulate demand.
Concurrently, the proposed "One Big Beautiful Bill" (OBBB) aims to dismantle key provisions of the Inflation Reduction Act (IRA), including the elimination of the 30% Investment Tax Credit (ITC) and Production Tax Credit (PTC) for renewable energy projects.
The bill also seeks to terminate the 25D residential solar tax credit by the end of 2025 and impose supply chain restrictions on materials from "foreign entities of concern." These policy shifts could have profound implications for the housing industry.
Economic Impact
The IRA has been instrumental in propelling over $500 billion in clean energy investments, fostering job creation, and advancing renewable energy deployment. Rolling back these incentives may lead to increased energy costs for homeowners, with projections indicating a potential 7% rise in household energy expenses.
Economic analysts have expressed concern over the potential economic repercussions, warning that the OBBB could result in the loss of over 830,000 jobs by 2030, particularly within the renewable energy sector. Moreover, the abrupt policy changes have already caused significant market volatility, with solar company stocks experiencing sharp declines.
The housing market’s current fragility amplifies the risks associated with undermining clean energy incentives. Builders are already contending with affordability challenges, as housing affordability remains at its worst level in 30 years. The elimination of energy-efficiency incentives could further strain homebuyers, particularly in entry-level and move-up segments, by removing cost-saving measures that help offset rising interest rates and construction costs.
For builders and developers, the repeal of tax credits under the IRA could result in higher construction and operational costs for high-performance homes. The IRA has helped defray the costs of clean technologies like solar panels, battery storage, electric heat pumps, smart panels, and energy-efficient HVAC systems.
Without these incentives, projects that once penciled out financially may no longer be viable, especially in cost-sensitive markets where affordability is already a major challenge.
Moreover, the proposed early expiration of the 25D residential solar tax credit could significantly reduce homeowner demand for rooftop solar systems—one of the most visible and widely adopted features of net-zero energy homes.
Builders who have positioned their product lines around solar-equipped, all-electric, or Zero Energy Ready Home (ZERH) certification may face a sudden mismatch between consumer expectations and cost realities.
For manufacturers of energy-efficient building products and clean technologies, the outlook is equally precarious. The IRA catalyzed more than $500 billion in announced investments, leading to expanded domestic production capacity for solar panels, heat pumps, high-performance windows, battery systems, and smart home energy devices. A rollback could destabilize this growth trajectory, prompt layoffs, freeze planned expansions, and dampen investor confidence.
Supply chain complexity is another concern. The OBBB could disrupt access to critical components, such as polysilicon for solar modules or rare earth minerals for battery systems, leading to production delays and cost inflation.
Furthermore, the uncertainty surrounding federal energy policy exacerbates a broader crisis of confidence. Builders are contending with weak consumer demand, elevated interest rates, labor shortages, and tariff pressures. The erosion of clean energy incentives compounds these headwinds, making it more difficult to forecast demand, price homes competitively, and invest in long-term sustainability strategies.
Meanwhile, Across the Pond
While the U.S. debates rolling back clean energy incentives, international competitors are surging forward. In 2023, China invested an astonishing $890 billion in clean energy—more than three times the total global investment in fossil fuels.
The country continues to dominate global supply chains for solar panels, wind turbines, heat pumps, and battery storage technologies, accounting for more than 80% of global solar module production capacity. It’s not just about infrastructure—China is strategically positioning itself to control the future of building materials and technologies that define energy-efficient and climate-resilient homes.
The European Union, meanwhile, has transformed climate policy into industrial strategy. The EU has increased its legally binding emissions reduction target to 55% below 1990 levels by 2030, while pumping investments into green hydrogen, energy storage, and electrified housing infrastructure. European countries are actively leveraging regulatory certainty and public-private partnerships to build out smart cities, low-carbon housing, and sustainable supply chains—all while creating tens of thousands of green jobs and attracting global capital.
For U.S. builders, developers, and manufacturers, this matters enormously. The housing sector doesn’t operate in a vacuum—it is directly influenced by global competition in clean technology, materials pricing, and innovation cycles.
If the U.S. rolls back clean energy support, domestic manufacturers of energy efficiency and electrification products could see declining demand and fewer R&D dollars. This would widen the innovation gap between the U.S. and countries like Germany, Denmark, and China, where government policies are aligned with long-term decarbonization and tech competitiveness.
Additionally, global investors are increasingly looking to place capital in jurisdictions with stable climate policy and strong ESG frameworks. If the U.S. backtracks on clean energy, American builders and developers may lose access to green financing, while global firms aligned with EU or Asian sustainability regulations become more attractive to capital markets.
And, American manufacturers of energy-efficient building materials could lose competitive access to international markets that require compliance with rigorous carbon standards—especially the EU’s Carbon Border Adjustment Mechanism (CBAM), which penalizes carbon-intensive imports. If U.S. firms are not producing low-embodied-carbon goods, they will be priced out of global construction material markets.
Keep Calm and Carry On
Even if federal incentives are reduced or eliminated, long-term energy cost savings, grid resilience, and consumer demand for clean energy remain strong. Builders who continue specifying high performance, healthy, resilient, smart, solar powered homes will win, especially among younger homebuyers where sustainability is a baseline expectation.
Builders and developers who double down on data and messaging will command market attention and surpass their competitors. Those who can effectively communicate the long-term cost savings, indoor air quality improvements, and resilience benefits of sustainable homes will be the ones who maintain consumer confidence—particularly amid policy uncertainty.
And the manufacturers who can support those builders with validated product data, like Environmental Product Declarations (EPDs), will recognize performance advantages in their sales process.
Climate responsive design, green building, sustainability codes and mandates, and clean energy are not passing trends. They are economic and environmental imperatives.
Even if federal support falters temporarily, the long-term direction is clear: building professionals and manufacturers who leverage sustainability to reduce risk, add value, meet buyer demand, augment employee loyalty, and boost profitability will be best positioned to lead in a competitive and rapidly changing market.
About COGNITION Smart Data
COGNITION is the only market insights platform specifically engineered for the building industry’s sustainability transformation. We track evolving consumer behaviors, emerging technologies, policy shifts, competitive benchmarks, and market demand signals so you can adjust faster, sell smarter, and grow revenue—confidently.
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By Sara Gutterman
As cofounder and CEO of Green Builder Media, Sara is a visionary thought leader and passionate advocate for sustainability. A former venture capitalist, she has participated in the life cycle (from funding to exit) of over 20 companies, with an emphasis on combining sustainability and profitability. She lives in Lake City, Colo., with her husband, where she is an avid long-distance runner, snowboarder, and Crossfit trainer. She is also on the Board of Directors at Dvele, runs the Rural Segment for Energize Colorado, and is a former County Commissioner.Also Read