President Joe Biden
On Tuesday, President Joe Biden signed into law H.R. 5376, the Inflation Reduction Act of 2022. H.R. 5376 represents the largest energy efficiency legislative package in history, with over $369 billion of incentives to promote new technologies. The legislation also features Davis Bacon prevailing wage standards and registered apprenticeship standards.
H.R. 5376 includes several of SMACNA’s energy efficiency priorities, such as expanding the highly effective 25C tax credit for homeowners. H.R. 5376 will also incentivize building owners to upgrade their structures with current indoor air quality (IAQ) systems needed in pandemic-era buildings. SMACNA believes that improving overall building IAQ is a top priority for public and private sector stakeholders.
SMACNA-supported energy efficiency and decarbonization incentives in H.R. 5376 include:
- 179D: Temporarily expanding the 179D permanent deduction for ten years, lifting the lifetime limit for a three-year cap, including tax-exempt entities. Providing an increased base deduction when meeting prevailing wage and registered apprenticeship standards.
- 25C: Extending the 25C tax credit for ten years, eliminating the lifetime cap, and expanding the value of the credit to 30% up to at least $1,200 without limitation on energy property.
- 45L: Extending the 45L credit for ten years for single-family and manufactured homes.
- Grants and tax credits to reduce emissions from industrial manufacturing processes, including almost $6 billion for the largest industrial emitters like chemical, steel, and cement plants.
- Hope for Homes: $9 billion in rebates for energy-efficient residential technologies.
- Investment tax credits to build clean technology manufacturing facilities.
- Tax credits for clean sources of electricity and energy storage and roughly $30 billion in targeted grant and loan programs for states and nuclear power plants and electric utilities to accelerate the transition to clean electricity as well as provide incentives and financing for hydrogen energy, biofuels plants, and technology that captures carbon from fossil fuel plants.
- Grants to Reduce Air Pollution at Ports, funded at $3 billion, support the purchase and installation of zero-emission equipment and technology at ports.
- Retrofit Financing Bank: Financing for competitive grants to charitable or public-funded non-depository financial services non-profits for quick deployment of HVAC efficiency upgrades, low and zero-emission products, technologies, and services.
- Critical Facility Modernization: Grants to states designed to provide improved energy efficiency and increase the resiliency of essential public buildings, including schools, libraries, museums, and many other local and state building facilities.
- GSA Energy Efficiency: Support for purchasing high-efficiency technology, efficiency-related goods, and energy efficiency upgrade contracting services.
- Comprehensive permitting reforms designed to help contractors and consumers with fewer steps to gain approval with proposed time limits to consider high-priority projects.
- Additional language on school efficiency standards and IAQ retrofit support from federal, state, and local agencies assisting grant and program implementation.
Enactment of H.R. 5376 into law represents a significant victory for SMACNA members. Through this single piece of legislation, SMACNA’s commercial, residential, and industrial efficiency tax agenda will become law after more than a decade of work by our chapters, staff, and members in every market segment. Over the coming weeks, SMACNA will further examine the law's impact on these key areas so our members can better understand its impact on their businesses.
