The Inflation Reduction Act is being hailed as the most significant climate legislation in U.S. history with $369 billion in climate-related spending. The climate provisions are projected to reduce America’s carbon emissions by nearly 40% by 2030.
Many of the provisions will directly impact consumers in terms of clean energy tax credits, rebates, and other financial incentives. For the building electrification and decarbonization industry, the legislation means additional funding for renewable energy technology, progress toward a reduction in greenhouse gas emissions, significant infrastructure investments, and more green jobs.
Here are some of the highlights:
- Renewed emphasis on sustainable power solutions in the form of new, expanded, or extended tax credits for the manufacturing of wind turbines and solar panels.
- Funding for federal projects constructed with low-carbon building materials.
- Tax credits and incentives for developers building new highly efficient and electric homes that meet the U.S. Department of Energy’s Zero Energy Ready Home qualifications.
- 1.3 million new jobs including more than 250,000 jobs in the construction industry.
- Potential for an additional $25 billion to $128 billion each year for financial risks related to climate change.
What does this mean for the decarbonization and building electrification industry?
The Inflation Reduction Act marks a significant investment in low-carbon buildings and materials. Large amounts are allocated to support constructing greener buildings for federally funded projects. There is also support to advance efforts to standardize the labeling of low-carbon concrete and construction materials. Specifically, $250 million was directed to the Environmental Protection Agency (EPA) to advance the development of standardized and transparent environmental product declaration of greenhouse gas emissions for construction materials.
Many of the climate provisions in the Inflation and Reduction Act will begin this year which means significant opportunities for developers and architects to build healthier buildings with sustainable materials. Additionally, this may mean increased oversight and green codes for municipalities. Finally, these new incentives have the potential to positively impact the climate action plans of many cities throughout the country.
At ID360 we will continue to monitor the implications of this historic legislation on the industry and its specific impacts on California’s green codes. Connect with us anytime with your questions.