When the Incentives Disappear, Will Sustainability Win?
6:39
The Senate’s version of the One Big Beautiful Bill ends billions in tax credits for energy efficiency and renewables, but buyer expectations could do what policy no longer will: force the industry to deliver better homes.
The recently passed Senate version of the One Big Beautiful Bill accelerates the phaseout of tax credits for wind and solar, slashes incentives for electric vehicles and chargers, and guts the energy-efficiency credits that have helped builders, remodelers, and homeowners invest in high-performance, electric, healthy homes.
If the current version of the bill passes in the House, here’s what’s on the chopping block:
Energy Efficiency: Home improvement incentives through 25C will sunset at the end of this year, and the 45L New Energy Efficient Home credit for builders will end mid-2026. Builders and developers hoping to tap into incentives for energy-efficient homes and commercial buildings will have to break ground before June 30, 2026, or lose access entirely.
Solar and Wind: The Senate’s version of the bill puts wind and solar incentives on a faster off-ramp than originally planned. Under this new timeline, projects that are already planned, financed, and approved can still claim the Production and Investment Tax Credits, but only if they break ground before June 2026 or are up and running by the end of 2027. That’s a sharp departure from the current timeline, which keeps these vital credits in place through 2032.
Additionally, the residential solar tax credit under Section 25D will phase out after December 31, 2025, and eligibility for leased solar hot water and battery storage systems will also be eliminated (even though most leased systems are already excluded by current legal interpretations of the tax code).
Electric Vehicles: Tax credits for new and used clean vehicles, as well as commercial clean vehicle fleets, are set to vanish after September 30, 2025. Credits for installing home or commercial charging stations expire on June 30, 2026. Some proposed provisions, like forcing the U.S. Postal Service to ditch its new EV fleet and tacking on annual fees for EV or hybrid registration, were dropped at the last minute, but the legislation will certainly impact momentum in the EV sector.
Nuclear, Hydropower, and Geothermal: These sectors get a longer leash. Projects will still qualify for incentives if they start construction before 2033, offering these alternative energy pathways some breathing room.
Hydrogen: The 45V clean hydrogen production tax credit lives on until January 1, 2028, a tiny lifeline for an industry already scrambling for footing (the original House version of the bill would have ended this tax credit immediately.)
Transferability: The Inflation Reduction Act provision allowing clean-energy developers to sell tax credits to other companies remains untouched. The House had tried to gut it, but the Senate version leaves it intact for now.
Additionally, the bill rips out unobligated IRA funding for nearly every program designed to slash emissions and accelerate the clean energy shift, including the DOE’s Loan Programs Office and the Greenhouse Gas Reduction Fund for local emissions projects.
Funding has also been cut for initiatives that focus on decarbonizing federal buildings, deploying low-carbon materials in new transportation projects, low-emissions electricity programs, and climate action grants for states, cities, and tribes.
The bill eliminates funding for oil and gas companies to fix methane leaks and rewrites the Energy Infrastructure Reinvestment program, stripping out the requirement that funded projects actually reduce or sequester emissions. Instead, priority shifts to “known or forecastable electric supply,” a clear nod to oil and gas companies, with an extra $1 billion tacked onto the original $5 billion fund.
Leveling the Playing Field
I’ve had many friends and colleagues reach out recently asking about my opinion about the proposed legislation. I relay to them that, over the past two decades, we’ve seen sustainability incentives come and go, but progress still continues.
Market forces, not incentives, should be the real engine of progress.
Sustainability upgrades that enhance energy efficiency, electrification, solar + storage, resilience, health and wellness, and decarbonization should be able to stand toe-to-toe with conventional options on cost. In many cases, they already do, offering not just lower operating costs but increased comfort and value.
Furthermore, younger generations of homebuyers are demanding sustainable solutions at unprecedented levels. They care about full cost and total value of homeownership, not just the cheapest price per square foot. They expect efficient appliances, heat pumps, battery storage, healthy air, and solar panels. They see resilience not as an upgrade but as a necessity.
Beyond the clear progression in buyer demand, businesses leading from the front are not stepping away from their sustainability commitments. Beazer Homes, as one example, has doubled down on its commitment to build Zero Energy Ready Homes throughout its entire portfolio across the nation. And building professionals and manufacturers continue to leverage corporate sustainability as a factor of differentiation to capture the hearts and minds of their target audiences.
So, if certain elected officials in Washington want to eliminate clean energy incentives, fine. But let’s make it fair: Scrap fossil fuel incentives and subsidies, too. Level the playing field for once and let the real market—the one driven by today’s informed, sustainability-minded homebuyers—decide what wins.
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.
When the Incentives Disappear, Will Sustainability Win?
The Senate’s version of the One Big Beautiful Bill ends billions in tax credits for energy efficiency and renewables, but buyer expectations could do what policy no longer will: force the industry to deliver better homes.
The recently passed Senate version of the One Big Beautiful Bill accelerates the phaseout of tax credits for wind and solar, slashes incentives for electric vehicles and chargers, and guts the energy-efficiency credits that have helped builders, remodelers, and homeowners invest in high-performance, electric, healthy homes.
If the current version of the bill passes in the House, here’s what’s on the chopping block:
Energy Efficiency: Home improvement incentives through 25C will sunset at the end of this year, and the 45L New Energy Efficient Home credit for builders will end mid-2026. Builders and developers hoping to tap into incentives for energy-efficient homes and commercial buildings will have to break ground before June 30, 2026, or lose access entirely.
Solar and Wind: The Senate’s version of the bill puts wind and solar incentives on a faster off-ramp than originally planned. Under this new timeline, projects that are already planned, financed, and approved can still claim the Production and Investment Tax Credits, but only if they break ground before June 2026 or are up and running by the end of 2027. That’s a sharp departure from the current timeline, which keeps these vital credits in place through 2032.
Additionally, the residential solar tax credit under Section 25D will phase out after December 31, 2025, and eligibility for leased solar hot water and battery storage systems will also be eliminated (even though most leased systems are already excluded by current legal interpretations of the tax code).
Electric Vehicles: Tax credits for new and used clean vehicles, as well as commercial clean vehicle fleets, are set to vanish after September 30, 2025. Credits for installing home or commercial charging stations expire on June 30, 2026. Some proposed provisions, like forcing the U.S. Postal Service to ditch its new EV fleet and tacking on annual fees for EV or hybrid registration, were dropped at the last minute, but the legislation will certainly impact momentum in the EV sector.
Nuclear, Hydropower, and Geothermal: These sectors get a longer leash. Projects will still qualify for incentives if they start construction before 2033, offering these alternative energy pathways some breathing room.
Hydrogen: The 45V clean hydrogen production tax credit lives on until January 1, 2028, a tiny lifeline for an industry already scrambling for footing (the original House version of the bill would have ended this tax credit immediately.)
Transferability: The Inflation Reduction Act provision allowing clean-energy developers to sell tax credits to other companies remains untouched. The House had tried to gut it, but the Senate version leaves it intact for now.
Additionally, the bill rips out unobligated IRA funding for nearly every program designed to slash emissions and accelerate the clean energy shift, including the DOE’s Loan Programs Office and the Greenhouse Gas Reduction Fund for local emissions projects.
Funding has also been cut for initiatives that focus on decarbonizing federal buildings, deploying low-carbon materials in new transportation projects, low-emissions electricity programs, and climate action grants for states, cities, and tribes.
The bill eliminates funding for oil and gas companies to fix methane leaks and rewrites the Energy Infrastructure Reinvestment program, stripping out the requirement that funded projects actually reduce or sequester emissions. Instead, priority shifts to “known or forecastable electric supply,” a clear nod to oil and gas companies, with an extra $1 billion tacked onto the original $5 billion fund.
Leveling the Playing Field
I’ve had many friends and colleagues reach out recently asking about my opinion about the proposed legislation. I relay to them that, over the past two decades, we’ve seen sustainability incentives come and go, but progress still continues.
Market forces, not incentives, should be the real engine of progress.
Sustainability upgrades that enhance energy efficiency, electrification, solar + storage, resilience, health and wellness, and decarbonization should be able to stand toe-to-toe with conventional options on cost. In many cases, they already do, offering not just lower operating costs but increased comfort and value.
Furthermore, younger generations of homebuyers are demanding sustainable solutions at unprecedented levels. They care about full cost and total value of homeownership, not just the cheapest price per square foot. They expect efficient appliances, heat pumps, battery storage, healthy air, and solar panels. They see resilience not as an upgrade but as a necessity.
Beyond the clear progression in buyer demand, businesses leading from the front are not stepping away from their sustainability commitments. Beazer Homes, as one example, has doubled down on its commitment to build Zero Energy Ready Homes throughout its entire portfolio across the nation. And building professionals and manufacturers continue to leverage corporate sustainability as a factor of differentiation to capture the hearts and minds of their target audiences.
So, if certain elected officials in Washington want to eliminate clean energy incentives, fine. But let’s make it fair: Scrap fossil fuel incentives and subsidies, too. Level the playing field for once and let the real market—the one driven by today’s informed, sustainability-minded homebuyers—decide what wins.
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.
Subscribe Now!
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