For nearly three decades, Energy Star has operated as a successful public-private partnership, resulting in annual savings of more than $40 billion in energy costs for consumers and businesses.
However, the program is at risk of being eliminated due to proposed budget cuts and restructuring within the Environmental Protection Agency.
More than 3,400 builders, developers, and manufactured housing firms also participate in the Energy Star Residential New Construction program, which sets strict energy-efficiency guidelines required to earn the designation. In 2024 alone, more than 330,000 buildings used Portfolio Manager, Energy Star’s online software, to measure building energy usage and savings, and approximately 350,000 newly built homes were Energy Star certified.
The program also offers rebates for a wide range of products, including dishwashers and HVAC systems. It also allows homeowners to claim tax credits for energy upgrades to their homes that they may not otherwise be able to afford.
“Industry observers outside of the sustainability community recognize Energy Star as one of the most amazing examples of good government you could possibly find. It solves so many problems, and it has such a huge impact,” says Sam Rashkin, the founder of Housing 2.0 and the former national director of the Energy Star for Homes program.
Industry organizations, including the National Association of Home Builders (NAHB), National Apartment Association (NAA), and National Multifamily Housing Council (NMHC), have banded together to advocate for the program and fight for its future.
“Energy Star has been a widely successful, voluntary program that is something that is so important for our industry,” says Paula Cino, vice president, construction, development, and land use at the NMHC. “At its core, it provides the industry with a lot of flexibility and really signals how to go at [energy efficiency] in the right direction, but it doesn’t mandate how you get there. It has been tremendously helpful for housing affordability.”
The real estate coalition has emphasized the program’s decades-long bipartisan support and its voluntary nature as key reasons to preserve it. Additionally, Nicole Upano, assistant vice president of housing policy and regulatory affairs for the NAA, that the Energy Star program has statutory protections.
“We believe that it firmly aligns with the president’s housing priorities and more broadly the administration’s priorities to release American energy dominance,” says Upano. “One great part of the program is that it provides a national standard to use all energy resources efficiently, and it doesn’t choose one source or another in terms of policy. As a baseline, it is widely bipartisan and has broad support across sectors in its current form.”
Ripple Effects of Elimination
Should the Energy Star program be discontinued, industry stakeholders warn of a wide range of ripple effects.
At a foundational level—beyond policies, tax credits, and certifications—Rashkin notes it would be “egregious” to lose the knowledge, wisdom, and lessons learned through the program if it were to dissolve.
“There is so much about what makes for really good government that should somehow be documented and set up for good guidance across all government,” he says. “What would be lost if the program goes, potentially, is all the wisdom that was acquired.”
For the industry, Cino notes Energy Star provides important education resources and materials that help guide owners, managers, and the broader building ecosystem on energy use and savings.
“There is utility to having that information that is helping our firms and members improve the energy performance of their buildings,” Cino says. “At this point, we understand that energy efficiency is not just a nice idea, it really is an important business consideration, and Energy Star really helps the industry do that.”
For MODUS, a multifamily developer focused on sustainability and Net Zero Energy homes, the standardized Energy Star program ensures a “level playing field” when comparing similar properties. It removes “green washing” situations where builders and developers claim they are green and sustainable without measurable proof. Rashkin adds Energy Star’s voluntary, national threshold has been incredibly beneficial to the industry, and losing it would be significant for the sector.
The concern is echoed by the NMHC and NAA, which worry about potential effects on state and local building performance and benchmarking standards if the Energy Star program is discontinued.
“It would be difficult to figure out what compliance would look like moving forward if the Energy Star program goes away,” Cino says. “What happens to the state and local mandates or where Energy Star certification is used for federal programs, grants, and opportunities? What is the replacement for that?”
The coalition of advocates are also concerned about the future of Section 45L tax credits for energy-efficient homes and buildings. The credits provide $2,500 for single-family and manufactured homes certified to Energy Star requirements and $500 per dwelling unit for multifamily buildings. Upano notes the House’s version of the budget reconciliation would eliminate 45L funding, while the Senate version would terminate incentives for qualified homes acquired more than 12 months after enactment.
“For developers, these investments have already been made and are accounted for in a project and community,” says Upano. “This could essentially pull the rug out from under them in terms of being able to realize cost savings. There is a concern about the ripple effects of that in increasing the cost of housing to renters.”
An Uncertain Future
With the future of the Energy Star program still uncertain, many builders and developers are choosing to stay the course. Beazer Homes, which had previously pledged to build 100% of its homes to the Department of Energy’s Zero Energy Ready Home program by the end of 2025, notes its energy-efficiency standards will remain a core part of its construction practices moving forward. MODUS also plans to keep energy efficiency at the forefront.
“We will continue to design and build as we have to these high levels for the past 20 years,” says MODUS president Ed Gorman.
The NAA, NMHC, and NAHB remain committed to advocating for the continuation of the Energy Star program. Still, Cino says the benefits of sustainable building practices and energy-efficiency standards have become so widely recognized that there is “an appetite for the industry to find an alternative” regardless of the program’s fate.
Rashkin is hopeful the Energy Star program will continue in some form—either within a government agency or through the private sector—but emphasizes that building high-performance homes is simply “better business,” no matter the broader policy environment.
“As a builder, don’t worry if the program stays or goes away,” Rashkin says. “Just be better at translating all the incredible value that you are delivering, not the least of which is the ability to trust you as a customer.”
