The recently enacted Inflation Reduction Act contains several very generous energy efficiency tax credits and deductions designed to promote low carbon in new construction and the retrofit of existing structures. These aggressive incentives for building owners to improve energy efficiency create substantial savings for residential, commercial, industrial, and public building contractors alike. However, looking beyond specific tax breaks such as the 179D, 25C, and 45L series of deductions, other loan, grant and performance contracting financing opportunities are available for building owners and contractors to fund major retrofits and new construction. The bill includes several other possibilities, including grant and rebate programs designed to quickly stimulate the launch of such projects. Many of the incentives for historic tax and energy savings are now in effect as others wait guidance from the Treasury Department, also expected soon.
One such program is the SMACNA endorsed HOPE for HOMES initiative, was championed over many years by Sen. Chris Van Hollen (D-MD) in the Senate and Rep. Peter Welch (D-VT) in the House. The program is multi-faceted, with one part of the initiative focusing on providing thousands of dollars in various tax credits and rebates for homeowners to retrofit their homes with new electric appliances, water heaters and heat pumps to save money on their energy costs. To help ensure this program also benefits Low-Medium Income (LMI) households, LMI -qualifying owners are eligible for more significant percentage rebates. In addition, a workforce training program is now available to support to residential contracting businesses, with $200 million to help workers participating in online training to advance their understanding of basic building envelope upgrades covered in the Act to enhance efficiency and overall home performance.
In addition, several grant programs will be advanced with many of the same objectives. These include grant programs to promote the retrofit of structures for improved energy efficiency and grants designed to enable the modernization of port facilities to reduce pollution and generate energy savings. There will also be grants and tax credits, now transferable to the contractor, allowing nonprofits and state and local public facilities to modernize HVAC and indoor air quality systems. In addition, the Act has a variety of incentives to retrofit and decarbonize critically important public buildings such as schools, libraries, and museums. SMACNA has several resources at the public's disposal to help launch a public sector HVAC improvement project for buildings such as schools.
