The Inflation Reduction Act Could Transform the US Buildings Sector

Originally posted by RMI. Authors David Smedick, Rachel Golden, and Alisa Petersen.

The US buildings sector has long been one of the most challenging when it comes to climate action, but a recent infusion of funds through the Inflation Reduction Act (IRA) could have a transformative impact on improving our built environment.

The IRA invests over $50 billion into clean energy technologies and improvements that can lower energy bills; make our homes, workplaces, and schools healthier and safer; significantly reduce climate pollution; and prioritize delivery of those benefits and new technologies to low-income and environmental justice communities. Successful implementation of the Act will mean Americans have greater access to efficient electric appliances, weatherized homes, rooftop solar, residential geothermal, low-carbon building materials, and more.

This investment, coupled with the Infrastructure Investment and Jobs Act, could reduce buildings sector climate pollution by anywhere from 33–100 million metric tons, getting us to between 10 and 30 percent of our 2030 goal to cut emissions in half. We are on the precipice of a massive transformation and must seize this opportunity to fully climate-align our buildings industry.

How Will the IRA Transform the Buildings Sector?
The IRA uses a suite of financial incentives to encourage individuals and businesses to invest in clean, efficient alternatives for their homes and businesses, rather than mandating these changes. As a result, the exact impact of the investment will be seen over time. Regardless, early analysis shows the IRA’s building retrofit programs could drastically change the landscape of the sector.

RMI’s initial analysis suggests the IRA could drive millions of retrofits, upgrades, and clean technology installations:

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