IRA Update: 2024 is the Year the Inflation Reduction Act Takes Off
2024 is poised to be a year of impact for the Inflation Reduction Act (IRA), as 2023 was the year of implementation.
Looking at the Affordable Care Act for example, which in 2023 provided health insurance coverage to more than 40 million people in the U.S.—a remarkable rate that is four times the coverage levels just a few years ago, the impact of the IRA is only to grow.
Crux, a clean energy finance platform, recently found that the market for selling IRA clean energy tax credits is going off. It has since reached a total of $7 billion to $9 billion in only six months after the Internal Revenue Service released its guidance last June 2023. Including manufacturing, these number reflect a strong market for clean energy investments.
According to the U.S. Green Building Council (USGBC), The U.S. General Services Administration, for example, has announced more than $2 billion in projects at federal courthouses, ports, agency facilities and other federal buildings around the country. The U.S. Department of Housing and Urban Development has awarded nearly $300 million in grants and loans under its Green and Resilient Retrofits Program, with more rounds of funding pending.
In addition, the Department of Energy (DOE) is poised to release nearly $9 billion to states in the coming months for energy efficiency and electrification rebates. The Federal Emergency Management Agency, meanwhile, has made two key policy changes enabled by the IRA that allow federal disaster aid to be spent on green upgrades in energy efficiency or on-site solar and on low-carbon materials. DOE will also start awarding grants this year from the $1 billion pot of funding for building energy code assistance.
On top of that, the IRS has issued most of the guidance necessary for private- and public-sector building owners to take advantage of a host of buildings-related tax incentives for investments in energy efficiency and clean energy technologies.