Electrical Equipment Distributors NAICS 423610

Jul 28, 2025 - Budget Reconciliation Law to Reduce Clean Energy Investment

• Renewable energy industry insiders expect the tax and policy bill signed into law in early July by President Trump to reduce clean energy investments, according to The Wall Street Journal. The Biden-era Inflation Reduction Act created 30% tax credits for renewable energy projects, either on the development side with Investment Tax Credits (ITC) or for producing clean energy with Production Tax Credits (PTC). The credits were to remain available until 2032. The legislation signed in July sunsets the ITC and PTC for wind and solar projects five years early in 2027. The new law also requires projects to have higher levels of US-derived content and increases restrictions on content from foreign entities of concern (FEOC). Princeton University’s REPEAT Project estimates the new law will reduce US electricity and clean fuels production by $500 billion over the next decade.
• U.S. electricity demand is expected to surge at a compound annual growth rate of 2.5% through 2035, according to Bank of America Institute and reporting by Utility Dive. After years of stagnant growth, electricity demand is growing due to building electrification, expanding data centers, industrial development, and rising electric vehicle usage. This acceleration, up from 0.5% annual growth over the past decade, poses serious challenges for aging infrastructure. The BofA Institute estimates 31% of transmission and 46% of distribution infrastructure is near or past its useful life. Some industry insiders suggest the US will need 15% more generation capacity – or an additional 120 gigawatts - by 2030. Recent Congressional testimony cited delays in generation interconnection and transmission permitting as significant headwinds for meeting rising demand.

• New single-family home sales rose 0.6% month-over-month and were down 6.6% year-over-year in June 2025, according to the US Census Bureau. June’s total new home sales reached 627,000 units. Economists polled by Reuters had expected June new home sales to reach 650,000. Higher interest rates and a lack of affordability have contributed to slower new home sales and an oversupply of unsold homes. In June, there were 511,000 new homes on the market, marking the highest level since October 2007.
• North American construction and engineering spending in 2025 is expected to grow by 1% after increasing an estimated 7% in 2024, according to FMI’s third-quarter 2025 North American Engineering and Construction Outlook. Nonresidential building construction spending is forecast to rise 1% in 2025 as growth in amusement and recreation (+6%), transportation (+4%), educational (+4%), and public safety (+2%), is offset by weakness in commercial (-4%), lodging (-3%), and manufacturing (0%). Amid high mortgage interest rates and a lack of affordability, single-family construction spending is forecast to rise by 1% in 2025. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 9% in 2025. Construction spending in the power sector in 2025 is expected to grow by 3%. FMI forecasts that energy construction and engineering spending will rise 8% in 2026, 7% in 2027, 4% in 2028, and 2% in 2029.