The South-central Partnership for Energy Efficiency as a Resource (SPEER), one of six Regional Energy Efficiency Organizations (REEO) across the country, applauds the recent passage of the Inflation Reduction Act (IRA) and the positive results it will have on the broader “Energy Efficiency” industry.
The nonprofit group Rewiring America, that promotes energy efficiency, said it estimated that the legislation could save households upwards of $1,800 a year. So, how could “IRA” impact the south-central region of Texas and Oklahoma?
Before we dive in it’s worth noting that an estimated 50% of homes in the south were built prior to the U.S. or states adopting building energy codes. This is especially true in Texas where much of the residential building stock is old: riddled with inefficient HVAC systems, inadequate insulation and windows, poor duct work, all leading to a leaky house that cannot keep warm or cool air in. As we aim to meet our climate goals, the residential sector remains a largely untapped source for carbon emission reductions and efficiency upgrades. This historic funding is key to advancing energy efficiency improvements in our homes. How could a national energy efficiency investment, such as the Inflation Reduction Act, benefit existing older homes? It could create over one million full-time jobs for ten years and save $66 billion on energy bills all while reducing emissions by 242 million tons per year according to the 2021 Energy Efficiency Jobs Report.
Disadvantaged Communities – The IRA will allow for investment in low-income and disadvantaged communities through designated funding that can be used for energy efficiency through building and home upgrades. These funds, through grants, will be allocated for climate justice work in an effort to maximize the potential of greenhouse gas reduction. Important aspects of home improvements such as weatherization to aid in resiliency and a more efficient home will be a part of the distributed funding.
***$27B in allocated funding
Building and Energy Code Improvements – Updated building and energy codes maximize the ability for a building to offer efficiency, resiliency and improved health and comfort for occupants. For Texas, in particular, the ability to add resiliency to both buildings and the Texas power grid enhances the state’s capacity to meet the ever-growing MW increases that have been seen in the summer of 2022. With the growing climate crisis each year, stronger building codes take advantage of improved home and building materials leading to stronger and healthier facilities and living spaces for all in our region.
***$1B in investment to be used for local and state jurisdictions who adopt latest model codes
Buildings – Improved retrofit components help to mitigate many of an aging housing and commercial building stock’s poor energy usage. From inadequate insulation to inefficient air conditioning and heating, Texas and Oklahoma have ample opportunity to make huge strides in the efficiency of our building stock. Increased funding will help to increase the ability for necessary and imperative changes to be made. These changes, similar to code changes, will help to solidify resiliency within the Texas market and improve the health and comfort for millions of residents within our region. Just as important, hundreds of millions of dollars will go to disadvantaged communities who live with daily energy burdens that affect their quality of life.
Just as important, the Inflation Reduction Act also brings back the tax credits for heat pumps and insulation upgrades for homeowners (25C) and tax incentives for “zero-energy” ready homes that are being built across the country. Weatherization of homes will play a critical part in the increased efficiency measures that SPEER champions, helping those home and business owners not only recoup savings through improved measures, but again, leading to a more resilient electric grid across the region.
Commercial buildings are not left out, as tax deductions and incentives will be available for energy-efficient commercial new builds and renovations.
***Up to $9B in funding for states
Rural Co-op Efficiency Upgrades – Funding will be available for rural electric cooperatives to upgrade efficiency measures within power plants, including transmission components.
***Current figure upwards of $1B in funding