As of now, the Build Back Better Act, or the Budget Reconciliation Bill, remains a collection of committee markups. Our understanding is that these marked-up committee documents will be become a comprehensive Budget Reconciliation Bill. This Bill will undoubtedly lead to a flurry of debates and amendments being put forth before a vote that may come at the end of September.
We’ve spent the last week trawling through the committee markups looking for investments in energy efficiency and building electrification. After being noticeably absent in the infrastructure bill, building electrification has entered the limelight during the budget reconciliation process with multiple mentions and dedicated programs. From heat pump rebates to zero-energy building codes to improved tax credits, here’s what we found.
Starting with the big-ticket items, we have tracked over $36 billion dedicated to building decarbonization across eight programs:
$9 billion for heat pump rebates including $3,000 for HP HVAC, $1,250 for a HPWH, and $3,000 for a panel upgrade. Not only that, more than 60 percent of the funding ($5.5 billion) is dedicated to Tribal communities or low- and moderate-income households, who are eligible for increased rebates of $6,000 for HP HVAC, $1,750 for a HPWH, and $4,000 for a panel upgrade.
$9 billion for home energy retrofit rebates in the amount of $2,000 for achieving energy savings of 20 percent or $4,000 for achieving energy savings of 35 percent. Rebates are doubled for buildings with low-income tenants/homeowners.
$6 billion for HUD to improve the efficiency and climate resilience of affordable housing of multi-family properties, including through renewable generation and building electrification.
$5 billion for the Energy Efficiency and Conservation Block Grant Program to continue providing grants to local governments for energy efficiency and renewable energy projects.
$3.5 billion for the Weatherization Assistance Program on top of the $3.5 billion earmarked in the infrastructure bill.
$5 billion for the Energy Efficiency and Conservation Block Grant Program to continue providing grants to local governments for energy efficiency and renewable energy projects.
$1 billion for high-performance green federal buildings to be administered by the General Services Administration.
$300 million for building code assistance, two thirds of which is set aside specifically for zero-energy codes (technically codes that meet or exceed the zero-energy provision of the 2021 IECC).
We have also tracked an additional $22.5 billion across four programs related to building decarbonization but not specifically dedicated to buildings:
$17.5 billion for improving the energy efficiency of federal buildings and vehicles including through electrification.
$3.2 billion for critical facility modernization which can fund projects that improve the resilience of buildings through integrating renewable energy or improving efficiency.
$1.1 billion to carry out demonstration projects which can include demonstrations of advanced building technologies.
$700 million for the DOE Loan Programs Office to make up to $30 billion in loans for renewable or energy efficient systems and manufacturing, and distributed energy generation, transmission, and distribution.
$10 million to reduce air pollution and GHG emissions at schools in low-income and disadvantaged communities.
Finally, the mark up from the Ways and Means Committee proposes extending and increasing several key energy efficiency tax credits that are due to expire at the end of the year:
Nonbusiness Energy Property Credit (for home energy efficiency improvements such as air source heat pumps, efficient gas furnaces, and building envelope measures) – deadline is extended from 2021 to 2031 and value is increased from 10 to 30 percent.
Residential Energy Efficient Property Credit (for installing solar, battery storage, geothermal heat pumps, and other alternative energy equipment at a residential property) – deadline is extended from 2023 to 2033. Amount remains at 30 percent.
Energy Efficient Commercial Buildings Deduction (for property developers who exceed the latest ASHRAE 90.1 standard by a certain threshold) – base amount is increased from $1.80/sf to $2.50/sf and threshold is reduced from 50 percent to 25 percent.
New Energy Efficient Home Credit (for the new construction of energy efficient homes) – deadline is extended from 2021 to 2031 and amount is increased from $2,000 to $2,500 for single family homes. The bill introduces a bonus credit of $2,500 (for a total of $5,000) if the building is certified as a zero-energy ready home.
It is important to stress that this is a dynamic process, and we expect the numbers to change. Accordingly, we will continue to add elements and update funding on our new Reconciliation Bill Page as the bill’s components are finalized. If we missed anything or if there are other sections that you think we should be tracking, please get in touch by replying to this email.
A few notes on the data:
- We tracked amendments where it was clear that those amendments passed.
- The Committee for the Budget notes that the total number in the bills does not add up to $3.5 trillion “because the instructions reflect offsets and overlapping jurisdictions.”
