Legence - Leveraging Time-Sensitive Government Incentives for Your Building Upgrades

Leveraging Time-Sensitive Government Incentives for Your Building Upgrades

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Introduction to incentives and the IRA

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The benefits of leveraging government incentives

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How the incentives work

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Valuestacking net-zero incentives

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How partnering with Legence can benefit your building project

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Introduction to incentives and the IRA The passage of the Inflation Reduction Act (IRA) marks one of the most significant legislative accomplishments for decarbonization efforts in history. Providing $370 billion dollars toward clean technologies, a range of generous federal incentives, and other low-carbon solutions like energy retrofits, the IRA is spurring transformational change throughout the U.S. Building owners now have the opportunity to cash in by value-stacking federal, state-wide, and regional incentives to dramatically lower the cost of environmentally-friendly property upgrades.

In addition to cost savings, these incentives offer commercial and industrial facilities the chance to strengthen their Environmental, Social, and Governance or ESG performance.

Incentives don’t last forever, meaning there’s a financial risk to inaction. Discover how leveraging government incentives can maximize your building’s efficiency while hedging against high energy costs for decades to come. Legence’s experts can help secure preferential and funding sources while streamlining upgrades quickly and conveniently.

$370 billion in funding are are provided toward clean technologies, a range of generous federal incentives, and other low-carbon solutions with the passage of the IRA.

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The benefits of leveraging government incentives More than a third of U.S. emissions come from the built environment, including commercial and industrial buildings. Net-zero incentives — particularly federal ones like the IRA — will play a critical role in facilitating the transition to net-zero while creating thousands of well-paying jobs.

For years, the upfront cost of green improvements has represented a poignant barrier to decarbonizing the built environment, even in spite of the medium and long-term energy savings they produce. The IRA and other regional incentives tackle this problem, dramatically lowering upfront costs to make sustainable building upgrades accessible and economically attractive.

Building owners can now curb a significant portion of the cost of upgrades, including energy-efficient appliances, doors and windows, heat pumps, distributed energy resources (i.e. rooftop solar, battery storage), and more, vastly improving their ROI.

For years, the upfront cost of green improvements has represented a poignant barrier to decarbonizing the built environment, even in spite of the medium and long-term energy savings they produce.

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How the incentives work Two types of incentives are offered by the IRA: redeemable tax credits that can be claimed during tax season, and partial refunds (i.e. rebates) that are applied as upfront discounts on purchases.

Heat pumps, electrical infrastructure improvements, distributed energy resources, water heaters and more are covered by rebates, whereas commercial retrofit upgrades benefit from tax breaks. Section 179D of the US tax code, which previously set financial incentives for commercial retrofits at a maximum of $1.88 per square foot, was increased by the IRA to $5.00.

The rebate and tax incentive amounts vary by upgrade, with greater amounts offered for more impactful technologies.

$2,500 can be claimed by Boston building owners in state rebates for air-source heat pumps.

$0.08-0.12 per square foot can be claimed by Boston building owners for enhanced insulation.

40% off specific high-efficiency investments for Connecticut building owners.

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Valuestacking net-zero incentives In addition to providing generous rebates for sustainable upgrades, the IRA is stackable with state and city-wide incentives, further reducing the cost of emission-cutting building upgrades.

For example, Boston building owners can claim $2,500 in state rebates for air-source heat pumps — capable of replacing inefficient combustion furnaces — as well as $0.08-$0.12 per square foot for enhanced insulation.

Connecticut offers building owners low and zero-interest financing, in addition to 40% off specific high-efficiency investments. These are two of many incentives that, when stacked with the IRA, make building upgrades vastly more economical while producing significant cost savings.

Monitoring state and local government websites is highly encouraged, as it’s an effective way of staying up-to-date with commercial and industrial upgrade opportunities.

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How partnering with Legence can benefit your building project The experts within Legence’s companies have extensive knowledge in decarbonizing the built environment, and can help guide building owners and operators through the complex regulatory and policy environment needed to claim their incentives. As one of the largest ESG consultancies in the country, we lead you through the process from ideation to implementation.

The ability to leverage the IRA and other state and municipal benefits has made sustainable building upgrades more cost-effective than ever before. Legence, the world’s first Energy Transition AcceleratorTM and integrated provider of ESG consultancy, building design, construction, and maintenance services, is well-positioned to assist clients in transitioning their built environments to net zero.

The ability to leverage the IRA and other state and municipal benefits has made sustainable building upgrades more cost-effective than ever before.

To discuss how you can leverage government incentives by partnering with Legence — who can turn complexity into clarity every step of the way — please get in touch with us here.

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