As federal support for clean energy initiatives faces potential rollbacks, the economic and environmental stakes for American households and businesses have never been higher.
The Inflation Reduction Act (IRA) of 2022 catalyzed a surge in clean energy investments, with over $493 billion funneled into the sector between mid-2022 and mid-2024. However, current legislative efforts aim to repeal or curtail these advancements, along with much longer-standing programs like ENERGY STAR, jeopardizing both our planet's health and economic stability.
Federal Rollbacks Threaten Economic and Environmental Gains
The proposed elimination of the ENERGY STAR program is particularly alarming. Since its inception in 1992, ENERGY STAR has saved American consumers and businesses over $500 billion and prevented approximately 4 billion metric tons of greenhouse gas emissions.
Operating at less than 1% of the EPA's annual budget, the program has been instrumental in promoting energy efficiency across various sectors. Its discontinuation could lead to increased energy consumption and higher utility bills for consumers.
The rollback of clean energy tax credits, including those for solar and wind energy, jeopardizes the momentum of renewable energy adoption. This is especially troubling as the nation requires an estimated 700 gigawatts of new renewable power by 2040 to maintain grid reliability, not to mention meeting zero carbon emissions targets set by states and municipalities from coast to coast and other climate commitments.
The pending elimination of the 30% residential solar tax credit by the end of 2025—nearly a decade ahead of its scheduled phase-out—threatens to destabilize the solar industry, which has experienced tenfold growth over the past decade (with over 66 gigawatts of residential solar installed, the sector supports over 100,000 jobs.)
Similarly, the abrupt cessation of electric vehicle (EV) tax credits could stifle the burgeoning EV market, undermining efforts to reduce transportation-related emissions.
Rising Energy Costs Amid Policy Shifts
Contrary to campaign promises of reduced energy costs, recent analyses by the Energy Information Administration (EIA) indicate that households may face increased electricity bills due to these policy changes. The EIA projects a 13% rise in average retail electricity prices from 2022 to 2025, with some regions experiencing even higher increases.
An analysis by the Center for American Progress suggests that the average American household could pay up to $70 more per year for electricity within five years if the proposed cuts are enacted.
Dismantling of Disaster Preparedness Infrastructure
In a troubling development, the National Oceanic and Atmospheric Administration (NOAA) has announced plans to cease updates to its Billion-Dollar Weather and Climate Disasters database, a critical tool for tracking the economic impact of extreme weather events.
This decision comes amid staffing shortages and budget cuts, leaving communities less equipped to prepare for and respond to climate-related disasters. The database has been instrumental in understanding the increasing frequency and severity of such events, which have averaged 23 per year from 2020 through 2024.
Consumer Demand and Industry Commitment to Sustainability
Despite federal policy shifts and political headwinds, consumer demand for sustainable solutions remains robust. COGNITION Smart Data reveals that:
Builders and developers are responding accordingly: 67% of building professionals prefer to work with sustainable brands and 85% are now specifying products with Environmental Product Declarations (EPDs).
In fact, leading builders, developers, and manufacturers are not retreating from their sustainability commitments. Rather, they are doubling down, recognizing that sustainable practices are not only environmentally responsible but also economically advantageous.
COGNITION data reveals that building professionals and manufacturers alike believe that investments in decarbonization strategies, such as energy-efficient technologies and sustainable materials, enhance innovation and brand credibility, mitigate risk, attract eco-conscious consumers, and provide long-term cost savings.
The establishment of the Green Impact Exchange (GIX), the first U.S. stock exchange exclusively for sustainability-focused companies, underscores the financial sector's recognition of sustainability as a critical investment criterion.
State and Local Governments Uphold Stringent Standards
Even as federal policies waver, state and local governments are advancing robust environmental standards. The 2024 International Energy Conservation Code (IECC) introduces significant updates, including requirements for operational carbon rating and energy reporting.
States like California and Massachusetts are leading the charge in mandating comprehensive greenhouse gas (GHG) emissions disclosures for large buildings, emphasizing transparency and accountability in carbon emissions.
In California, the Climate Corporate Data Accountability Act (SB 253), signed into law in October 2023, requires U.S.-based entities with over $1 billion in annual revenue doing business in the state to annually report their Scope 1 (direct), Scope 2 (indirect from consumed energy), and Scope 3 (indirect upstream and downstream) GHG emissions.
The reporting for Scope 1 and 2 emissions is set to begin in 2026, with Scope 3 emissions reporting commencing in 2027. This legislation aims to provide a clearer picture of corporate carbon footprints and drive reductions in emissions across entire value chains.
Massachusetts has implemented the Large Building Energy Reporting (LBER) policy, requiring owners or agents of buildings over 20,000 square feet to report their energy usage, including sources like oil, propane, wood, and on-site renewable energy generation. This policy, effective from 2025, ensures that energy consumption data is publicly disclosed, promoting energy efficiency and aiding in the state's climate goals.
These state-level initiatives underscore a growing trend toward rigorous environmental accountability, compelling large building owners to assess and mitigate their carbon emissions proactively. While the policies are currently focused on commercial buildings, it’s only a matter of time before they are applied in some manner to the residential sector.
On the transportation side, California has exercised its right under the Clean Air Act to set stricter vehicle emissions standards, a policy adopted by 13 other states and Washington D.C. However, recent legislative efforts aim to revoke these waivers, undermining states' rights to protect public health and combat air pollution.
This move disregards the unique environmental challenges faced by different regions and the proven success of state-led initiatives in reducing emissions and fostering innovation in clean transportation.
What This Means for Builders, Developers, Manufacturers, and Consumers
The potential elimination of programs like ENERGY STAR and the rollback of clean energy tax credits pose significant challenges for builders and developers.
ENERGY STAR has been a cornerstone for promoting energy-efficient construction, providing builders with a competitive edge and access to incentives like the 45L tax credit. Without these programs, builders may lose crucial financial leverage and market differentiation, especially as consumers increasingly prioritize sustainability in their purchasing decisions.
Moreover, the uncertainty surrounding federal support for clean energy projects is causing the sector to falter. Nearly half of the $30 billion in clean tech factories scheduled to come online in 2025 are now predicted to face delays or cancellations, potentially stalling innovation and economic growth in the sector.
Manufacturers, particularly those in the clean energy sector, are facing a precarious future due to the proposed rollbacks. The uncertainty has already led to the suspension or cancellation of numerous projects, with approximately 20,000 clean energy jobs lost since the November election and an additional 40,000 at risk.
The rollback of tax credits and incentives also threatens to undermine the competitiveness of U.S. manufacturers in the global market. With other countries continuing to invest heavily in clean energy, the U.S. risks ceding leadership in this critical sector, potentially leading to long-term economic disadvantages.
For consumers and homeowners, the proposed policy changes could lead to higher energy costs and reduced access to energy-efficient technologies. The elimination of tax credits for residential solar panels, electric vehicles, and energy-efficient home improvements would not only increase upfront costs but also diminish long-term savings on energy bills.
Analyses suggest that households may face increased electricity bills, with projections indicating a 13% rise in average retail electricity prices from 2022 to 2025.
Furthermore, the rollback of programs like ENERGY STAR could limit consumers' ability to make informed choices about energy-efficient products, potentially leading to higher energy consumption and costs over time.
Call to Action
As CEO of Green Builder Media, I’ve spent nearly two decades advocating for sustainable policies, practices, projects, and products that align environmental stewardship with economic prosperity.
Today, I’m deeply concerned by this series of federal actions that threaten to unravel hard-won gains in clean energy, resilience, and public health. These policy shifts not only jeopardize our planet's future but also undermine the economic stability and well-being of American families and businesses.
Rolling back climate progress is not merely an environmental misstep; it is an economic blunder. The proposed dismantling of clean energy incentives threatens to increase energy costs, stifle innovation, and cede global leadership in the burgeoning green economy. Conversely, maintaining and strengthening these programs supports job creation, economic growth, and environmental resilience.
It's imperative that we, as citizens, business leaders, and policymakers, advocate for the preservation and advancement of initiatives that align economic growth with environmental responsibility.
I urge you to contact your Senators and Representatives to express your support for clean energy tax credits, state-level emissions standards, the Energy Star program, and robust disaster preparedness infrastructure. By doing so, we can ensure that sustainability remains at the forefront of our national agenda, securing a healthier, more resilient future for all.
Want to learn more about zero carbon building? Enroll in Green Builder Media’s COGNITION Academy, which has robust courses on net zero carbon building, green building fundamentals, green product essentials and green building program like ENERGY STAR, Zero Energy Ready Homes, Indoor airPLUS, WaterSense, and HERS ratings.
And, be sure to check out the COGNITION Carbon Offsets Marketplace if you’re interested in purchasing carbon offsets to mitigate emissions from your products, projects or lifestyle.