Inflation Reduction Act Headed to President's Desk

On August 12, the House passed the Inflation Reduction Act (IRA). The reconciliation bill passed the Senate earlier last week by a vote of 51 to 50 along party lines, with Vice President Kamala Harris providing the tie-breaking vote. The IRA details a scaled-back version of the Biden-Harris Administration economic agenda, after months of negotiations. The bill largely focuses health care, investments in disadvantage communities, and climate investments.

In addition to other energy-related tax credits, the bill will provide $4.3 billion for fiscal 2022 for the Energy Department to implement a “Home Owner Managing Energy Savings” (HOMES) rebate program. Under the program, state energy offices would develop plans and provide rebates for homeowners and aggregators for energy savings retrofits through Sept. 30, 2031. It would provide for projects on single-family homes the lesser of 50% a project’s cost or rebates between $2,000 for energy savings of 20% to 35% or $4,000 for savings of 35% or more, respectively.

Owners of multifamily buildings and aggregators could also qualify to receive rebates capped at $200,000 or $400,000 for energy savings of either 20% to 35%, or 35% or more, respectively. 

The program would also allow contractors performing a retrofit to claim their own $200 rebate for each home in a disadvantaged community. 

Early versions of this provision excluded energy efficient pool pumps for qualifying for this rebate program. However, after extensive advocacy from PHTA, this prohibition was not included in the final bill.

In addition, the bill will provide $330 million for fiscal 2022 for grants to help states adopt residential and commercial building energy codes that meet or exceed the 2021 International Energy Conservation Code, the ASHRAE Standard 90.1-2019, or some combination of those codes. These funds could also be used to implement building codes achieving equal or greater energy savings. It would provide a further $670 million for states and local governments to adopt building codes to meet or exceed the zero-energy provisions in the 2021 IECC and to implement a plan to achieve compliance with newly adopted building energy codes.

President Biden plans to sign the bill this week and shared that a celebration will be held on September 6 for the passing of this legislation.