In the year since the Inflation Reduction Act (IRA) was enacted, a wave of optimism and innovation has swept across America's energy landscape. This transformative legislation, aimed at fueling cleaner energy adoption and bolstering economic growth, represents more than a policy shift—it's a national commitment to sustainability.
From incentives for home energy efficiency upgrades to ambitious targets for clean power generation, the IRA has sparked a movement that resonates with homeowners, businesses and industries alike.
At Engineered Tax Services (ETS), we are at the forefront of this transformation, helping clients navigate and capitalize on the opportunities presented by the IRA. Through specialized services like 45L tax credits and 179D tax deductions, we align with the IRA's energy efficiency goals, ensuring property owners and investors reap the full benefits. Join us as we delve into the first-year highlights of the IRA and explore how ETS can empower your journey towards a cleaner, more prosperous future.
Highlights from the Department of Energy's Report
The Department of Energy's review of the Inflation Reduction Act's first year contains encouraging projections about its impact on energy savings, the environment and the economy. Here are some of the key takeaways:
Home Energy Efficiency Upgrades
The report predicts homeowners will save significantly on electricity bills thanks to IRA incentives for energy-efficient upgrades. By 2030, average household savings could reach $370 per year. Early rebate programs are seeing high demand as homeowners install insulation, weatherization and efficient appliances. This helps cut costs while reducing energy waste.
Cleaner Power Generation
The IRA aims to double the share of American electricity from clean sources to 80% by 2030. This transition from fossil fuels to renewables will be accelerated by expanded tax credits. The report expects greenhouse gas emissions to fall 40% below 2005 levels partly as a result of clean power investments.
Economic Benefits
The report estimates the IRA could create 1.5 million new jobs in sectors like construction and manufacturing. Tax credits also give businesses and consumers direct funds to invest in efficiency upgrades. There is clear potential for economic growth as clean energy is deployed.
How ETS Aligns with the IRA's Energy Efficiency Goals
At ETS, we offer two specialized tax services that directly align with and support the energy efficiency goals of the Inflation Reduction Act:
45L Tax Credits
The 45L credit provides incentives for energy-efficient new construction and substantial renovation of residential properties. As more property owners and developers pursue upgrades like high-efficiency HVAC systems, insulation, and ENERGY STAR appliances, ETS makes sure they fully benefit from available 45L credits. For example, we recently helped investors in Florida claim $410,000 in credits for efficient multi-family housing.
179D Tax Deductions
The 179D deduction applies to energy-efficient commercial buildings and residential properties 4-stories or higher. ETS works with technical designers of tax-exempt projects and owners of offices, warehouses, retail stores, parking garages and more to certify their lighting, HVAC and building envelope improvements. This results in substantial tax savings, such as the $397,300 a parking garage owner recently received through partnering with ETS.
The Road Ahead for Energy Efficiency
The Inflation Reduction Act represents a crucial opportunity to accelerate America's transition to cleaner energy and more efficient buildings. At ETS, we are fully committed to helping clients capitalize on this opportunity.
Our specialized 45L and 179D tax services will continue to provide the expertise and guidance property owners need to pursue upgrades aligned with national climate goals. Whether you own residential rentals or commercial buildings, we make it easy to maximize your tax incentives.
But our work is far from over. Fully realizing the IRA's potential will require sustained effort from all stakeholders over many years. ETS plans to continue expanding our services to empower more clients to pursue energy efficiency and sustainability.
We also recognize that economic, social and environmental justice must be at the heart of this transition. Clean energy solutions must be accessible and affordable for all communities, in keeping with our ongoing mission to boost local and national economies by providing lucrative tax incentives to everyday Americans.
An Ongoing Journey
The Inflation Reduction Act represents an important step forward, but turning its goals into reality will be an ongoing journey requiring sustained collaboration.
At ETS, our focus is on shaping real-world solutions tailored to each client’s needs. We see tremendous potential in the IRA’s framework and are dedicated to working together to implement it effectively.
The road ahead is long, but one worth traveling. We invite you to contact us today to partner with ETS on your journey towards greater energy efficiency and increased profitability. The future is bright when we build it together!
