Ray Shampine was pulling refrigerant lines through the attic of a Denver apartment building on January 30, 2026. Shampine is a lead installer for Elephant Energy, a heat pump company out of Lakewood, Colorado. He still sizes the unit, runs the lines, makes the connections. A heat pump is a heat pump. Everything between the work and the customer, though, has gone to hell.
Thirty days before that attic job, the federal tax credits that had made residential clean energy a straightforward sale disappeared. Section 25C, covering heat pumps, and Section 25D, covering solar, were eliminated by the One Big Beautiful Bill Act. No phase-down. No gradual reduction. A homeowner looking at a $7,000 heat pump lost $2,000 from the calculation overnight. A $30,000 solar system lost $9,000. The simplest part of the sales conversation, the part where you subtract the credit and show the real number, became something requiring a flowchart.
Shampine happens to work in Colorado, which is one of the better places to be standing when the federal floor drops out. That should tell you something about how bad the floor collapse is. Colorado still has a state tax credit. A separate pool of IRA dollars the OBBBA didn't touch funds the HEAR program, providing up to $8,000 for heat pumps, $14,000 for lower-income households. Xcel Energy runs its own rebate. Rural co-ops run theirs. Holy Cross Energy in Glenwood Springs offers $3,500 for members, $7,000 for income-qualified households. That's at least five programs Shampine or someone at his company has to understand before answering the only question the homeowner actually asked: what does this cost me?
Each program has different eligibility rules, different application processes, different timelines. HEAR rebates are income-limited to households below 150% of area median income. State credits require a tax return. Utility rebates depend on which utility serves your address. Before the OBBBA, the federal credit was universal. You bought the equipment, you claimed the credit. Now the answer to "what does this cost" depends on where you live, what you earn, who provides your electricity, and whether you can wait for a rebate check or need the discount at the register. The installer has to know all of this. Nobody's paying him to.
Elephant Energy saw the cliff coming. Last summer, the company told customers that installer availability would shrink as the year-end deadline approached and that contracts signed in August 2025 were "guaranteed a 2025 install." Triage language, the kind you use when you're managing a line at the emergency room. Across five major utility territories, Colorado's heat pump installations doubled to 14,225 in 2025, a twelvefold increase in three years. But that surge happened while the federal credit still existed. Patricia Rothwell of Colorado's Energy Efficiency Business Coalition told the Colorado Sun in February that other programs would "help fill the gap." Colorado is the good scenario. As of last August, IRA Home Energy Rebates were available in only 11 states and the District of Columbia. The majority of the country has nothing to fill.
A spokesperson for the Air Conditioning Contractors of America offered the plainest forecast:
"When Canada's Green Homes program ended suddenly, heat pump sales collapsed with it. That is likely to happen in the U.S. as well."
Without incentives, customers shift to minimum-efficiency systems and smaller jobs. The work keeps coming. It just gets cheaper and dumber. The second half of 2025 confirmed the pattern in reverse. EnergySage reported a 205% surge in homeowner engagement as the deadline approached. Installers prioritized speed over specification, customers grabbed whatever was available. A fire sale that looked terrific on the quarterly reports.
Now a detail worth savoring. Democrats on the House Ways and Means Committee wrote to Treasury Secretary Bessent pointing out that the OBBBA cited the wrong subsection of Section 25C when it killed the credit. The IRA had moved the relevant provision from subsection (h) to subsection (i). The letter argues the credit legally remains in effect through 2032. The IRS issued guidance treating it as expired anyway. More than 2.3 million households claimed 25C in 2023 alone.
So the man in the attic, the one threading refrigerant lines through someone else's ceiling, now works in a landscape where the federal credit is dead, or possibly alive through a legislative typo, depending on which branch of government you ask. State programs exist in some places and not others. Utility rebates depend on your address. Income thresholds depend on your household. The homeowner at the kitchen table wants to know what the thing costs, and the honest answer is: it depends on about nine things nobody in government has bothered to consolidate into a single number.
The bid used to be simple. The work still is. Everything between the work and the customer has become an unpaid translation service, performed by the person holding the wrench.
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The solar market restructures: With the 25D credit gone for customer-owned systems, EnergySage expects the residential solar market to shift heavily toward leases and prepaid power purchase agreements that still qualify under commercial tax credits, fundamentally changing who owns the panels on your roof.
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Heat pumps still outselling gas: Despite the national sales dip in 2025, heat pumps outsold gas furnaces by their biggest-ever margin in 2024, suggesting the technology has crossed a competitiveness threshold that may survive the incentive collapse in states with strong utility programs.
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Massachusetts backstop is shrinking: The strongest remaining state program, Mass Save, is already on a scheduled decline from $10,000 in whole-home rebates in 2025 to $9,000 in 2026 and $8,000 in 2027, a trajectory worth watching as a leading indicator of whether state-level support can hold.
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The 25C legal dispute: The unresolved argument that Congress cited the wrong subsection when it killed the heat pump credit remains an active technical challenge with no resolution timeline, leaving installers unable to tell customers definitively whether the credit is dead or dormant.