Building Efficiency | Strategic Insights:

The Inflation Reduction Act makes available billions of dollars in incentives for corporate, government, and nonprofit organizations to invest in the energy efficiency and performance of their owned and controlled building assets.

For corporations, a great deal of the direct incentives for building energy efficiency improvements is confined to monies made available via the Energy Efficient Commercial Buildings Deduction (i.e., Sect. 179D) and the Energy Infrastructure Reinvestment Financing, both of which are itemized above.

However, the buildings and construction sector’s equipment manufacturers, implementers, and service providers, as well as companies specializing in building asset development, management, and maintenance would be remiss to overlook the sizable new business opportunities opened by the mobilization of federal funds toward federal agencies, lower governments, and certain nonprofit organizations.

In brief, state, local, and Tribal institutions, as well as eligible nonprofits, will be seeking opportunities to maximize the life cycle impacts of the grants they’re awarded; and in circumstances where grants are awarded on a competitive basis, it’s likely that applicants demonstrating shovel-readiness will be best positioned. It is also likely that disbursements of direct federal spending will be provisioned on the severity of the needs they’re meant to address, determined by a range of factors, among other yet-to-be-determined criteria.

To that end, non-corporate fund recipients would do well to identify and evaluate projects across a range of metrics suitable for IRA funding. And to ensure this process yields actionable results, they would do well to consult with reputable service providers who are practiced in the accurate estimation of project costs, delivery timelines, and financial (e.g., energy cost savings), environmental (i.e., energy-related emissions), and public health (e.g., indoor air quality, hazardous waste production, etc.) outcomes.

Additional clarity from the U.S. Departments of Treasury, Energy, Housing and Urban Development, as well as the Environmental Protection Agency and General Services Administration will prove vital in empowering fund recipients and their partners to initiate these critical projects. In the meantime, however, decision makers in the buildings and construction sector must prepare and market services for IRA fund recipients that stand capable of satisfying the eligibility criteria for the legislation’s wealth of funding mechanisms.

AND LEGENCE IS HERE TO HELP.

SPOTLIGHT:

Energy Infrastructure Reinvestment

The establishment of the Energy Infrastructure Reinvestment Program of the Department of Energy’s Loan Programs Office gives owners and investors of high-emitting, fossil energy-related infrastructure a significant opportunity to strengthen their sustainability credentials in the capital markets and otherwise avoid divestiture, or worse, stranding their assets entirely.

But retooling, repowering, and repurposing in this fashion requires a degree of technical knowledge, technological capacity, and project management expertise that falls outside the remit of the typical buildings and construction service provider.

SPOTLIGHT:

Air Pollution In Schools

Among other shortcomings of our public building infrastructure, the pandemic era underscored the perennial challenge of deferred maintenance backlogs in education facilities. And with state and local governments juggling the dual needs of not only recruiting and retaining faculty and staff, but investing in the technologies, processes, and other resources needed to combat student learning loss, it’s increasingly likely that institution-level allocations for overhauling buildings and equipment will suffer.

To that end, it is imperative that the institutions applying for competitive grants and other funding to address air pollution at schools work with service providers that can guarantee cost efficiency.