Funding for Green Retrofits
Federal Tax Credits, Rebates, Low-Cost or Forgivable Loans and Grants are Hitting the Ground
By Ravi Malhotra
3 min read
The Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) are in their second and third years, respectively. Treasury guidance is now available for almost all of the IRA’s clean energy tax credit provisions. Furthermore, $480 billion of BIL, and most of the approximate $390 billion of IRA clean energy funds have now been awarded from the Feds to states, municipalities and other entities.
Multifamily affordable housing owners and managers can access these incentives for green retrofits that will improve property value, cut utility bills and increase health and safety for their residents. However, navigating this funding is anything but intuitive, and preparation is crucial to successful project implementation. Those that haven’t been planning must start now.
Update on Key Funds
BIL’s $3.2 billion for the Department of Energy’s (DOE) Weatherization Assistance Program (WAP): Unless there is an extension in 2025, states have roughly two years to finish spending their BIL WAP allocations. Some of them have launched multifamily-focused programs and more are exploring the possibility. However, their familiarity with the multifamily segment is limited, so progress is slow.
IRA’s near-$9 billion for the DOE’s Home Energy Rebate Program: These dollars are moving through state energy offices (SEOs) and will reach multifamily affordable housing as rebates for energy efficiency and electrification. Per apartment, multifamily owners can secure up to $8,000 and $14,000, respectively. A handful of states have launched their rebate programs thus far, and it is expected that many others will launch through the end of the year.
IRA Funds from the Environmental Protection Agency (EPA):
- EPA has awarded all funds under its nearly $5 billion Climate Pollution Reduction Grants program. States, local governments, tribes and territories will use the money to implement projects that cut greenhouse gas emissions. Roughly $1.1 billion is going toward building solutions, such as energy efficiency and electrification.
- EPA has awarded all $27 billion under its Greenhouse Gas Reduction Fund (GGRF): GGRF comprises three subprograms: the $14 billion National Clean Investment Fund and the $6 billion Clean Communities Investment Accelerator—both of which will facilitate affordable financing for green projects—and the $7 billion Solar for All program, which will expand existing and create new solar programs for underserved communities, including multifamily affordable housing.
IRA’s funds for HUD’s Green and Resilient Retrofit Program (GRRP): The Department of Housing and Urban Development (HUD) recently finished awarding all GRRP funds. Over 180 HUD-assisted multifamily properties received GRRP funds to support energy efficiency, renewable energy and climate resilience improvements for their properties.
All the above can be braided with IRA-expanded tax credits, such as the Investment Tax Credit for Solar and Storage, the 45L for energy efficiency and the 179D deduction for energy efficiency. Multifamily stakeholders need to explore their opportunities to fold these dollars into capital stacks that will dramatically offset their project costs. Additionally, they can work with National Housing & Rehabilitation Association to advocate with state WAP agencies, SEOs, etc. for a fair investment in multifamily affordable housing. ICAST has created a suite of resources for this purpose.
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