Federal Policies Impacting the Roofing Industry

Over the years, the roofing industry has benefited from a variety of federal programs and tax incentives designed to encourage the improvement of existing buildings. These initiatives have supported efforts to enhance energy efficiency, bring building envelopes up to modern performance standards and extend the overall service life of structures. In the past few years, such capital incentives have made building envelope improvements, including roof replacements, more financially attractive.

As with any change in administration, the leadership, priorities and mechanisms driving these policies continue to evolve. While some programs established under the prior administration remain in effect, the current government has adjusted its focus and funding priorities to align with broader shifts in national energy and infrastructure objectives.

Consequently, some new incentives are emerging at the federal level and several existing programs continue to provide meaningful advantages for roofing contractors and their clients. However, responsibility for these efforts may have shifted from federal agencies to state or local governments. At the same time, other policies could experience reduced support, delayed implementation or eventual phase-out as priorities are redefined.

Against this backdrop, roofing professionals are navigating a period of transition, one marked by both opportunity and uncertainty. Understanding which tax incentives, grants and efficiency programs remain viable can be key to helping clients make informed investment decisions and positioning the industry for success in a changing policy environment.

Enhanced Section 179 expensing under H.R. 1

One of the most notable updates comes from H.R. 1, commonly referred to as the One Big Beautiful Bill Act. The legislation significantly enhances the tax advantages for building owners investing in capital improvements. Under Section 179 of the tax code, the maximum allowable deduction for qualifying property placed in service after December 31, 2024, has doubled to $2.5 million, with phase-out beginning at $4 million in total qualifying expenses. Businesses exceeding $6.5 million in total investments lose the deduction entirely. Importantly, these dollar amounts are indexed for inflation beginning in 2026.

This expanded deduction makes roof replacements a more strategic investment by allowing qualifying businesses to immediately expense the full cost in the same year the property is placed in service, instead of depreciating the cost over 39 years. In practice, this can significantly improve cash flow for building owners, particularly since reroofing projects generally do not qualify for bonus depreciation. For example, a business investing $3.9 million in improvements (including a $600,000 roof replacement) could claim the full $2.5 million deduction, benefiting from an immediate reduction in taxable income.

The time value of money makes this change especially meaningful. Cash retained today is worth far more than deductions realized decades later. Roofing contractors should recommend that their clients discuss these enhanced Section 179 rules with their tax professionals, as they can influence investment timing and project scope for 2025 and beyond.

Federal Tax Credits and Incentives in Transition

While Section 179 expensing provides continued opportunity, several other longstanding tax incentives are now facing a turning point.

179D Commercial Building Energy Efficiency Tax Deduction. Historically, 179D Commercial Building Energy Efficiency tax deduction (not to be confused with the Section 179 expensing) has rewarded building owners for achieving measurable improvements in energy efficiency, offering deductions of $2.50 to $5.00 per square foot depending on performance. Roofing upgrades often play a key role in qualifying projects. However, 179D will expire for projects with a begin-construction date after June 30, 2026. That means professionals currently pursuing or planning energy-efficient retrofit projects that include reroofing work should ensure they meet this timeline to take advantage of remaining incentives.

45L New Energy Efficient Home Credit. During the prior administration’s term, section 45L had driven demand among homebuilders for high-performance building envelopes, rewarding the construction of homes that meet ENERGY STAR® or the Department of Energy (DOE) Zero Energy Ready Home (ZERH) standards. Eligible single-family and manufactured homes have been able to receive a $5,000 tax credit, while qualifying multifamily units could earn up to $1,000 each. This tax credit will expire for homes purchased after June 30, 2026.

25C Residential Energy Efficiency Credit. The 25C residential credit that provided up to 30 percent back (up to $1,200 annually) for energy-efficient home upgrades, including insulation and air sealing expired on December 31, 2025.

HOMES Act and Electrification Rebate Program. Under the previous administration, DOE approved several state-level rebate programs, including the HOMES Act and the Electrification Rebate Program to incentivize residential energy efficiency and electrification upgrades. The program was designed to provide performance-based rebates for comprehensive home improvements, such as insulation and air sealing upgrades, applicable to both single-family and multifamily homes.

Today, the future of these efforts looks somewhat different. States that have already received federal allocations for their home energy improvement rebate programs are expected to continue administering them until existing funds are exhausted. They will likely remain operational in states that had their plans approved and funding distributed prior to recent policy shifts.

However, states that have not yet developed, submitted or received approval for their rebate programs face a less certain outlook. Consistent with the current administration’s broader redirection of federal energy priorities, additional funding for unapproved or pending programs may not move forward.

Contractors anticipating projects tied to these programs should proactively check the funding status with their state energy offices or the grant awardees to ensure that expected resources are still available.

The Future of Federal Grant Programs

In addition to tax credits, the federal government previously rolled out major grant programs aiming to reduce carbon emissions through the implementation of energy efficiency improvements and make clean energy more accessible to schools, communities and low-income households.

Among the programs that may impact roofing projects are the Renew America’s Schools Grant Program and the Solar for All Program. The Schools Grant program is a first-of-its-kind, $500 million competitive grant design to fund clean energy improvements in K-12 schools. It covers upgrades such as insulation, roofing and HVAC systems. The DOE awarded $80 million in its first round and had planned to distribute additional funds in phases over several years. Similarly, Solar for All Program is a $7 billion program aimed to expand solar access for low-income communities, including rooftop solar installations where necessary roof upgrades could be funded.

As of November 2025, both of these initiatives are under review by the current administration. Awards already distributed are expected to be honored, but future rounds or pending awards may face delays, modifications or cancellation.

Roofing professionals who anticipated opportunities through these grant programs should revisit project expectations and timelines, especially if their work depends on pending or anticipated awards.

Federal Funding Allocated to Energy Code Adoption

Another notable area of uncertainty involves federal support for state and local adoption of the latest building energy codes. The Bipartisan Infrastructure Law and the Inflation Reduction Act (IRA) funding had earmarked more than $1.2 billion to help state agencies and local jurisdictions to adopt updated building codes and promote their application to decarbonize the building stock. This funding was intended to accelerate adoption of the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1, as well as to promote “stretch” codes aligned with zero-net-energy goals.

While these programs remain in the books, it is unclear how future rounds of funding will be prioritized. Some states are likely to continue advancing code adoption independently, but at the federal level, the momentum may slow down as energy policy shifts.

Looking Ahead

For professionals, staying informed and adaptable will be key in this period of transition. Remember that even as federal priorities shift, opportunities may remain at the state and local levels, particularly where approved funding and code adoption efforts continue to drive demand for energy-efficient roofing solutions.

Contractors who adapt to changes can be best positioned to help their clients capture available incentives, optimize project timing and contribute to the ongoing improvement of the country’s existing building stock. Additionally, it is important to recommend that clients also align with tax advisors, energy consultants and state energy offices to confirm which programs remain active and how to leverage them effectively.

ABOUT THE AUTHOR:

Justin Koscher is the president of the Polyisocyanurate Insulation Manufacturers Association (PIMA). For more information, visit polyiso.org.