USGBC - US Green Building Council

12/16/2024 | News release | Distributed by Public on 12/16/2024 07:58

IRA update: Help defend the IRA’s tax breaks for buildings

Photo credit: © Henrico Public Relations and Media Services.
3 minute read
USGBC's federal legislative director shares the latest IRA news for green builders.

Feature image: The LEED Gold J.R. Tucker High School in Henrico, Virginia. Photo credit: © Henrico Public Relations and Media Services.

The Inflation Reduction Act created a powerful suite of federal tax incentives and other programs encouraging the real estate community to invest in energy efficiency and clean energy. And it's really just getting started: The tax breaks are set in law for a decade, until the early 2030s. That is, unless they are repealed.

Unfortunately, the outcome of the November elections has significantly increased the risk that repeal could happen, with President-elect Trump and many others repeatedly calling for rolling back at least parts of the IRA during the campaign. In fact, it's likely that legislative leaders on Capitol Hill are actively scrubbing the list of programs in the law now, as they prepare to advance legislation early next year.

What can you do?

The risk is very real, and that means it's time for the green buildings community to stand up and speak out to keep the energy efficiency and clean energy tax incentives out of the conversation. The best way to do that is for members of Congress to hear directly from companies and businesses in their states and districts that these incentives are important and are having an impact in their own backyards.

USGBC is working to mobilize our community. We've set up a dedicated page on our website where you can get the latest information and helpful talking points. One of the easiest things you can do right now is have your company or organization sign our letter calling on Congress to protect and maintain these incentives. If you'd like to make your voice heard as an individual, you can send a quick message to your members of Congress through our online tool.

Solutions that work for everyone

To be clear, the tax incentives for building energy efficiency and clean energy have long had bipartisan support. These are common-sense tax breaks that help create economic activity and job growth in the buildings sector, and they do so in a way that makes buildings more sustainable and resilient.

There shouldn't be partisan differences, for example, over offering homebuilders a tax credit for building more energy-efficient houses, or for commercial buildings owners to install geothermal heating and cooling systems or rooftop solar.

Part of the problem is that even many members of Congress don't understand the entirety of what these incentives are and how they work. This is why it's so important that our community speak up and educate their offices about the importance of these incentives.

Whether you are a small business or a major company, we urge you to get involved. If you have any questions about this campaign, please contact Ben Evans or Sabine Rogers on the USGBC Advocacy and Policy team.

IRA tax credits that benefit all builders and owners

We are working to protect the following tax incentives that were extended and expanded under the IRA:

45L New Energy Efficient Homes Credit: A tax credit for homebuilders encouraging construction of more energy-efficient new homes, with $2,500 for building Energy Star homes and $5,000 for building Department of Energy Zero Energy Ready Homes: The credit was originally created under the bipartisan Energy Policy Act of 2005 and has long had strong bipartisan support, including from homebuilders.

179D Tax Deduction for Energy Efficient Commercial Buildings: A tax deduction of up to $5.65 per square foot taken by building owners for commercial building energy efficiency improvements in new construction or renovation projects, such as improved HVAC systems and building envelopes. The deduction was originally created under the bipartisan Energy Policy Act of 2005 and made permanent via the appropriations process in 2020, during the last Trump administration.

48/48E Clean Electricity Investment Tax Credit: A tax credit, typically 30% on investment, for companies, including building owners, that are making clean energy investments such as rooftop solar, geothermal heating and cooling systems, and energy storage. Varying iterations of the clean energy ITC have been in effect for decades, with broad bipartisan support.

30C Alternative Fuel Vehicle Refueling Property Credit: A tax credit, typically 30% on investment, for property owners installing alternative vehicle infrastructure in rural or low-income census tracts. Eligible projects include fueling/charging equipment for biofuels, electric, hydrogen, natural gas and propane. It was originally created in the bipartisan Energy Policy Act of 2005.

25C Energy Efficient Home Improvement Credit: A tax credit of up to $3,200 for homeowners making energy efficiency improvements to their homes, such as improving insulation, duct sealing, windows, or heating and cooling equipment. The credit was originally created in the bipartisan Energy Policy Act of 2005 and has long had broad bipartisan support.

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