Rising Energy Costs Ahead: How Federal Clean Energy Rollbacks Impact Commercial Buildings

With the signing of the “One Big Beautiful Bill” (OBBBA) in mid-2025, the U.S. federal government set in motion a series of policy reversals that will reshape the economics of wind and solar by eliminating key tax credits on which the clean energy industry has long relied. By extension, these changes will fundamentally impact how commercial building owners and operators think about energy costs and decarbonization strategies going forward, with rising electricity prices, heightened volatility, and less clean power generation anticipated nationwide. 

In this article, we’ll break down the coming changes, what building teams can expect, and how to prepare for anticipated price hikes to hit utility budgets. 

The Policy Shift: A Rapid Step Back for Renewables

At a high level, the new federal law removes or phases out tax credits that had helped make wind and solar among the fastest-growing and cheapest sources of new energy in the U.S. These include:

• The Production Tax Credit (PTC) for wind
• The Investment Tax Credit (ITC) for solar
• Direct pay incentives and bonus credits for domestic manufacturing and disadvantaged communities

The rollback could put over 300 GW of clean energy capacity at risk – equivalent to the power generated by roughly 900 coal power plants. In Texas alone, the clean energy pipeline may shrink by more than 75 GW, meaning households could see annual energy bills rise by as much as $480 if projects are stalled or canceled.

Without these credits, the six largest U.S. energy regions may see retail rates rise by ~7% for homes and ~11% for businesses by 2029. And in states with weaker clean energy policies, the increases could be even greater, with the most significant cost hikes expected in states across the South and Midwest.

On the whole, these changes will add friction to the clean energy flywheel and increase uncertainty in energy markets. For large commercial buildings, this will mean greater exposure to demand charges, more volatile pricing, and potential impact to existing decarbonization pathways as access to clean power sources is curtailed. 

What Commercial Buildings Should Expect

Higher and Less Predictable Energy Costs

Solar and wind are the lowest-cost sources of electricity in many U.S. markets. Reducing federal support shifts the economics back toward fossil-fuel-based generation – which is more sensitive to fuel prices and weather volatility.

For commercial real estate portfolios, this means:

• Higher average energy rates: With ~11% average commercial increases expected by 2029, a 200,000 sq ft office could spend $50K–$100K more on electricity annually if usage isn’t managed.
• Spiking peak charges: Reduced solar and wind on the grid means more reliance on gas during high-demand periods. Facilities with time-of-use billing will feel the swing in sharp demand charges.
• Uneven regional impact: Buildings in the Midwest and Southern states – often lacking local renewable mandates – are tied to more volatile power markets.

Increased Operational Complexity

In an environment where costs are more volatile, the energy stack becomes more layered. Facilities and sustainability teams will have to coordinate energy procurement, onsite generation, demand response, and reporting, all while continuing to navigate state regulatory requirements and ongoing pressures to cut OpEx while improving sustainability performance. 

In short, a building that used to run on autopilot now needs to think like a power plant.

Where Control Is Still Possible: Automation, Load Shifting and Operational Strategy

One lever that remains firmly in your control? How and when your buildings use energy.

With tools like automated demand management (ADM), commercial portfolios can proactively reduce their exposure to peak pricing, reduce emissions, and maintain occupant comfort, all without requiring major CapEx or the installation of onsite renewables.

How ADM Works

ADM platforms (like Noda Command) optimize a building’s load by adjusting zone-level cooling setpoints in real time. It’s not “shutting things off” – it’s fine-tuned demand flexibility:

• Precooling: Start the day a few degrees cooler to avoid using energy during peak hours
• Smart shedding: Slowly and imperceptibly reduce load zone-by-zone during demand windows
• Peak prediction: Use machine learning to forecast when peaks will occur and prepare accordingly

The result? Real energy savings and meaningful cost avoidance – without jeopardizing indoor comfort. Whether you’re navigating new price volatility or simply want to find new and creative ways to cut costs, demand optimization remains a proven lever:

• Up to 15% load reduction during peak events, per national research from LBNL
• Demand-charge savings of $0.10–$0.20 per sq ft/year, depending on rate structure
• One-year ROI in most building types, particularly those with 50+ zone-level HVAC units

And perhaps most critically: ADM provides visibility. Facilities teams can see which equipment is participating, measure the load shed in real time, and track the cost and carbon benefits. That kind of operational transparency is increasingly non-negotiable.

Implications for Clean Energy and ESG

While the federal pullback from renewables will certainly slow momentum, it doesn’t erase the long-term need – or regulatory mandate – for decarbonization. It’s important to remember that: 

1. Global and state-level mandates remain: In California, SB 253 and SB 261 still require major disclosures and Scope 1 and 2 emissions reduction plans for thousands of large companies.
2. Investor expectations persist: ESG and environmental performance are now embedded in access to capital, insurance underwriting, and even tenant leasing decisions.
3. Clean power industry players are responding with urgency: Clean energy developers are asking state regulators for procurement reform to keep projects moving. 

In short: ESG goals haven’t gone away. But achieving them will now require smarter operational strategies, especially when incentives fall short.

Final Thoughts

The clean energy landscape is shifting, but commercial buildings don’t need to wait for Washington to act.

If you oversee a portfolio that spans different utilities, tariffs, and lease types, now is the time to invest in operational resilience:

• Visualize your demand curve
• Explore automating load shedding and demand response 
• Find carbon and cost savings without relying on strategies tied to external incentives – revisit bread and butter operational improvements and make sure you have the means to identify, track, and measure these activities at the site level

The transition to a clean, cost-effective grid is still happening. It’s just moving faster in some places than others. And for building owners and operators, staying ahead means turning intent into action – every hour, every zone, and every degree.

About Noda

Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.