August 16, 2022
Today, President Biden signed into law the Inflation Reduction Act (IRA), which represents the largest clean energy investment in the nation’s history.
The IRA’s programs have the potential to catalyze enormous growth in the energy efficiency sectors of both Pennsylvania and New Jersey. KEEA and EEA-NJ applaud this vital investment and will work to ensure that this funding translates into saved energy, increased energy equity, and high-quality jobs across our region.
The Inflation Reduction Act makes significant investments into energy efficiency. It includes:
Funding for retrofitting and electrification
- $4.3 billion to DOE for state energy offices to develop and implement a HOMES program, offering rebates for whole-home energy retrofits, with preference for low- or moderate-income households.
- $4.5 billion for grants to State Energy Offices and tribes to create electrification rebate programs for low- to moderate-income homeowners and owners of multifamily buildings that house low- to moderate-income residents.
- $200 million for states to develop and implement energy efficiency training for contractors.
- $1 billion for loans and grants to improve energy or water efficiency, climate resilience, and other health and sustainability needs in affordable housing.
Funding for updated building codes
- $1 billion for updated building energy codes, about ⅔ of which is aimed towards helping states and municipalities adopt zero-energy codes.
It also revamps tax credits to promote energy efficiency improvements by:
- Overhauling and increasing the 25C nonbusiness energy property credit for home energy efficiency improvements. The credit is now available to homeowners annually.
- Revising and expanding the 179D energy efficient commercial buildings deduction. A 5x bonus on the credit is offered if prevailing wage and apprenticeship requirements are met.
- Extending and increasing the 45L tax credit for developers and contractors who build energy efficient housing units, including zero-energy ready multifamily homes, with a 5x bonus on certain projects that meet prevailing wage requirements.
We will be hosting a members-only, in-depth virtual briefing on the IRA in late August or early September—keep an eye on your inboxes for more details! To learn more about joining KEEA and/or EEA-NJ, please email Jeaneen Zappa at email@example.com.
Resources on the Inflation Reduction Act:
Franklin Energy: Inflation Reduction Act is a Game-Changer for the Climate and Energy Consumers (by Board President Lloyd Kass)