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Inflation Reduction Act Signed Into Law

Aug. 16, 2022
USGBC, ASCE say the Act will trigger a decade of federal investment to incentivize the construction of green buildings and cities; ABC, ASA oppose the Act.

On Aug. 7 the U.S. Senate passed the largest climate legislation in U.S. history,  a $370 billion package expected to drive down greenhouse gas emissions by 40%, including unprecedented incentives and investments in green buildings. President Biden is expected to sign the bill into law in a ceremony on Tuesday, August 16th.

The Inflation Reduction Act includes key provisions on heath care as well as reforms to the tax code. A major component is investment in clean energy to combat climate change. The total package raises some $737 billion, with $369 billion for "Energy Security and Climate Change," as well as $300 billion towards deficit reduction.

Once signed into law, the act will trigger a decade of federal investments that aim to transform markets for energy efficiency, renewable energy and other clean energy technologies.

The bill comes on the heels of the Infrastructure Investment and Jobs Act (passed in November) and the CHIPS and Science Act (passed earlier in August), creating a pipeline of federal money towards projects in infrastructure, key manufacturing segments, education and more.


The US Green Building Council issued a statement on the bill that outlined some of the key provisions for green buildings and cities.

View a USGBC slide deck that covers the highlights.

The core of the climate package is a suite of tax incentives that will be in place for a decade or more, providing a new level of economic certainty for clean energy markets. The bill includes significant expansions and extensions of tax incentives for energy efficiency improvements to homes and buildings (including the 179D, 45L and 25C incentives), renewable power generation, electric vehicles, distributed energy resources and other clean energy technologies.

It also includes billions of dollars in investments in public building upgrades, green building improvements to affordable housing and low embodied carbon construction materials. Plus, it offers tens of billions in new clean energy financing opportunities, such as Department of Energy loans, a clean tech accelerator green bank, and environmental justice and community redevelopment grants.

In a statement on the USGBC web site, the organization said:

USGBC is proud to have advocated for many of these provisions in recent years. Achieving policy success is a long game that requires persistent advocacy to seize windows of opportunity when they open.

This bill isn’t everything, but we believe it is a historic turning point in our collective efforts to address the climate crisis. Thank you to all in the green building community who helped make it happen.

(To get more involved in the USGBC's advocacy programs interested parties may sign up for the Advocacy Working Group or contact Ben Evans with any questions.)


The American Society of Civil Engineers approved the passage of the Act, hoping that it would address the effects of climate change on the nation's infrastructure. Dennis D. Truax, President of ASCE issued a statement saying in part:

ASCE recommends a federal energy policy that provides clear direction for meeting current and future demands that factors in technology change, carbon reduction, renewables and distributed generation, and rate affordability. The Inflation Reduction Act addresses these recommendations at a never-before-seen scale...

We thank Congress for including future-ready infrastructure in this legislation so that communities can thrive.


Following passage of the bill, Associated Builders and Contractors issued a statement calling the legislation "radical," saying it would likely not reduce, but instead increase inflation, as well as the workforce shortages and material prices that currently plague the industry. Kristen Swearingen, ABC vice president of legislative and political affairs went on to comment:

This unprecedented expansion of prevailing wages not only puts contractors that use industry-recognized apprenticeships at a serious competitive disadvantage when it comes to winning contracts for these critical energy projects, but it also limits the ability of many otherwise-qualified small businesses and skilled construction professionals from participating in these projects.

For an industry facing a workforce shortage of 650,000 in 2022, this is no time to impose restrictive labor policies that would exclude nearly nine out of 10 U.S. construction workers from building America’s energy infrastructure.


The American Supply Association is part of a coalition of more than 70 organizations that opposed the Inflation Reduction Act. A letter authored by the coalition and addressed to Speaker of the House Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell reads in part:

The Biden Administration claims the savings in the IRA are "front-loaded," and will reduce the deficit in the short-term, helping easy inflationary pressures... that is simply not the case. Recent analysis by the Congressional Budget Office, Penn-Wharton and others shows the Inflation Reduction Act would increase prices in the short term and do little to bring them down in the long run.

The coalition also expressed concerns that the added funding for the IRS included in the Act will mean more audits for family-owned businesses which are fully in compliance with the tax code.

Finally, the coalition objected to a section of the Act, the Warner Amendment, which extends for two years the Section 461(l) cap on losses a business owner is permitted to claim, saying: 

The cap on active pass-through loss deductions is bad policy at any time, but it is particularly harmful when the economy is weak and an increasing number of businesses are suffering losses.


Plumbing Manufacturers International approved of the act as part of ongoing conservation efforts. In a statement, PMI CEO Kerry Stackpole said:

Plumbing Manufacturers International is pleased the Inflation Reduction Act includes funding for important conservation programs and a number of measures to advance drought mitigation and resilience efforts. The new law represents a major investment in helping to protect the critical water supplies in the Southwest.

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