On Tuesday, August 16, the Inflation Reduction Act was signed into law by President Biden. The legislation is designed to address and fight inflation in the United States. One of the things that this bill includes is over $369 billion of incentives to promote new energy conservation technologies. This is a big first step toward cutting down energy waste and decarbonizing the United States’ building portfolio.
The Inflation Reduction Act of 2022, or H.R. 5376 includes many of SMACNA’s priorities in terms of energy efficiency. Many of the SMACNA-supported incentives in this bill include tax credit incentives. One incentive extends the 25C tax credit for ten years, while another incentive extends the 45L credit for single-family and manufactured homes. More tax credit incentives include grants and tax credits to reduce emissions from industrial manufacturing processes, investment tax credits to build clean technology manufacturing facilities, and tax credits for clean sources of electricity and energy storage.
Additionally, the bill includes “Hope for Homes,” which is $9 million in rebates for energy-efficient residential technologies as well as GSA Energy Efficiency, which is support for the purchase of high-efficiency technology, efficiency related goods and energy, and energy efficiency upgrade contracting services.
The bill also features Retrofit Financing Bank, which provides financing for competitive grants to charitable or public-funded non-depository financial services. The goal is quick deployment of HVAC efficiency upgrades, low and zero-emission products, technologies and services. Three other SMACNA-supported incentives included in the bill are the Critical Facility Modernization, GSA Energy Efficiency, and Comprehensive permitting reforms.
The Critical Facility Modernization is a formula grant given to states to provide improved energy efficiency and increase the resiliency of important public buildings such as schools, libraries, and museums, among other local and state buildings. The GSA Energy Efficiency incentive is support to purchase high-efficiency technology and efficiency related goods, as well as energy efficiency upgrade contracting services. And finally, the Comprehensive permitting reforms are designed to help both contractors and consumers with fewer steps to gain approval, with proposed time limits to consider high priority projects.
The passage of the Inflation Reduction Act is a big win for SMACNA members. Because of H.R. 5376, SMACNA’s commercial, residential and industrial efficiency tax agenda will become a priority. After more than a decade of working to establish these laws and urging lawmakers to support the passage of H.R. 5376, SMACNA’s tax agenda has finally become law.