ICAST Experts Weigh In: Available Federal Tax Credits, Incentives, and Grants for Underserved Communities
By Ravi Malhotra: Founder and President| Mr. Malhotra’s focus is finding financially sustainable models to solve the affordable housing crisis while tackling climate change. He manages the design and implementation of all ICAST programs and initiatives.
Kristen Cheriegate: Senior Policy Analyst | Ms. Cheriegate navigates ICAST through the policy world to obtain real-world solutions, funding resources, and networks with potential partners to provide more services to low-moderate-income households.
ICAST is expending a lot of resources and efforts to remain current on all funding opportunities that will benefit low-and-moderate-income (LMI) households and offer environmental justice and social equity via tax credits and other incentives. Previous ICAST publications on these topics have provided a broad perspective on some of these resources; here, we have compiled a more comprehensive list with detailed descriptions of the relevant and valuable funding to our customers and LMI households.
179D Tax Deduction: This tax deduction for commercial building (incl. MF) owners and designers has been increased on a sliding scale of $0.50/sq.ft. for energy savings of 25% and up to $1/sq.ft. for energy savings of 50% or greater. There is a 5X multiplier if the rehab is done with prevailing wages.
45L Tax Credit: provides a $2.5K/apartment tax credit for new MF buildings that meet EPA’s ENERGY STAR Residential New Construction Program and $5K/unit credit if bldg. meets DOE’s Zero Energy-ready requirements. The credit is 1/5th the value if construction does NOT use prevailing wages.
Click here for the previous ICAST article expanding on these tax benefits from the Inflation Reduction Act.
Solar Investment Tax Credit (ITC): a tax credit for solar and battery storage projects that can be claimed on federal income taxes. The deduction has been increased to cover 30% of eligible installation costs through 2032, and projects may be eligible for up to six different bonus credits that could raise the value of the ITC by up to 70% of the cost of the project’s installation costs. Non-profits can obtain cash in lieu of ITC directly from the IRS.
For the previous ICAST article expanding solar in underserved communities.
Climate Pollution Reduction Grants: total of $5B supporting efforts by states, municipalities, Air pollution control agencies, and tribes, to develop and implement pollution reduction strategies. The RFP for this program is out for Phase I – planning. Eligible entities will be awarded grants to create Climate Action Plans, a prerequisite to applying for the $4.6B in implementation grants.
Environmental and Climate Justice Block Grants: a total of $3B for community-based organizations to advance environmental justice and support carbon mitigation and social equity projects.
GHG Reduction Fund: total of nearly $27B via two grant competitions. The General and Low-Income and Disadvantaged Communities Competition ($20B) aims to create a network of eligible non-profit entities to facilitate technical assistance and capacity building. The Zero-Emissions Technologies Competition ($7B) allows states, tribes, municipalities, and eligible non-profit entities to deploy solar, energy storage, and EE upgrades in MFAH—more guidance on the competitions to come in the summer of 2023.
For previous ICAST article on EPA funding for green upgrades and preservation.
High Efficiency Home Rebates (HEEHRA): a total of $4.5B, with up to $14K per LMI household to electrify their heating for space, water and food. These funds will flow to State Energy Offices (SEO), creating the disbursement plans.
Home Energy Performance-Based Whole Home Rebates (HOMES): a total of $4.3B, with up to $8K per LMI household to upgrade energy equipment, improve energy efficiency, and reduce pollution. These funds will flow to State Energy Offices (SEO), creating the disbursement plans.
The Green and Resilient Retrofit Program: a new program created by the Department of Housing and Urban Development (HUD) with a total of $1B in funding for HUD-assisted housing to protect tenants, reduce property damage, reduce energy and water consumption, and mitigate the impact of natural disasters on low-income residents.