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.

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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.

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