Inflation Reduction Act

President Joe Biden signed the Inflation Reduction Act of 2022 (IRA) into law on Aug. 16, 2022, following its passage along party lines in the U.S. Senate and House of Representatives. This comprehensive legislation is the result of many months of negotiations among Democrats to advance some of President Joe Biden's highest policy priorities.

The law firm Holland & Knight has put together a comprehensive 43 page summary of the IRA here. Below, we summarize some of the major provisions to address climate change through energy efficiency and renewable energy generation. We note in […] how these funding will likely. be delivered in Oregon.

This helpful FAQ on the revised Electric Vehicle tax credit was published by the U.S. Department of Treasury.

  • Energy Efficiency Property Credits [Contractors]

    Energy Efficient Home Credit

    The IRA will extend through 2032 and increase the value of the residential energy efficient property credits providing contractors with tax credits for housing units built or remodeled to reach energy-saving specifications for a variety of home types, e.g., $2500 for a single and multi-family homes. (p. 16)

  • Heat Pumps [Energy Trust of Oregon]

    High-Efficiency Electric Home Rebate Program

    The IRA's $4.28 billion High-Efficiency Electric Home Rebate Program will provide an upfront rebate of up to $8,000 to install heat pumps that can both heat and cool homes. It also provides a rebate of up to $1,750 for heat pump water heaters. (p. 32)

    Electric heat pumps typically cut heating costs by 50% while a heat pump water heater is 2 to 3 times more efficiently than an ordinary electric water heater. (US DOE Estimate)

  • Building Efficiency [US DOE Programs]

    Nearly $10 billion is allocated to building efficiency through DOE programs, with resources passing through to states, local governments, tribes, and directly back to homeowners in the form of residential efficiency rebates to lower household energy bills.

  • Whole-House Energy Savings Retrofits [Energy Trust of Oregon]

    US DOE HOMES Program

    The IRA will provide $4.3 billion to DOE to award state energy offices to develop and implement a HOMES program, offering rebates for whole-house energy savings retrofits. (p 32-33)

    - Retrofits with savings of 20-35%: up to $2,000

    - Retrofits with savings of > 35%: up to $4,000

    - Measured energy savings in home or home portfolios with energy savings of ≥ 15%: payment rate per kWh saved, equal to $2,000 for a 20% reduction for the state's average home, or 50% of the project cost

  • Building Efficiency and Resilience [Oregon State Agencies]

    Assistance of Latest and Zero Building Energy Code Adoption

    The IRA will provide $1 billion total for support to state and local governments to adopt updated building codes, broken down as follows:

    - $330 million to DOE to support states and local communities to adopt updated building energy codes for residential and commercial buildings, or to implement a plan to achieve full compliance including training and enforcement programs. Residential buildings must meet or exceed the 2021 International Energy Conservation Code, or achieve equivalent or greater energy savings

    - $670 million for DOE to support grants for states and local governments to adopt building codes that meet or exceed zero energy provisions in the 2021 International Energy Conservation Code or an equivalent stretch code, and implement a plan to achieve full compliance including training and enforcement.

  • EV Tax Credit [Personal Income Tax Filing]

    Clean Vehicles Credit


    For new electric vehicles, a $7,500 tax credit will be available from all car makers, regardless of the number of EVs they have already sold.

    Purchasers of used EVs under $25,000 could be eligible for up to a $4,000 credit.

    Eligibility to receive the credits depends on income as well as how much the new or used vehicle costs.

    Starting in 2024, the Inflation Reduction Act establishes a mechanism that will allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the purchase price.