Navigating the Inflation Reduction Act Journey with Help from Trane

Trane’s team of project design, construction and smart building experts can help you navigate the Inflation Reduction Act and leverage the benefits of its tax credits and rebates.

The Inflation Reduction Act

The Inflation Reduction Act is impacting projects in commercial and industrial buildings across the country. With its enhanced federal tax credits, grants and rebates, it can help significantly impact your building projects and help you improve aging infrastructure, augment building performance and take advantage of clean energy while helping to save money in the process.

Trane is well positioned to help you get the most out of all the Inflation Reduction Act benefits by helping to navigate the process and its challenges.

Qualifying Upgrades

“I’m not sure if the upgrades we have in mind qualify, and I don’t have the time to become an Inflation Reduction Act expert.”

Expanded commercial building regulations, like those featured in the Inflation Reduction Act, extend significant tax credits and rebates for states to expand local building codes and performance standards for existing and newly constructed commercial buildings. Projects that build resiliency, include clean energy technologies and help to improve whole building performance may qualify.

Here’s a look at expanded tax incentives for reimagining building retrofits, installing clean energy technologies, helping to improve whole building performance and more.

Energy Investment Tax Credit (48 ITC)

Energy Investment Tax Credit (48 ITC) – Now offers a credit value of up to 70% of the total cost of energy property projects that include thermal energy storage, solar, geothermal heat pumps, among other factors. Note in 2025 the ITC converts to tech-neutral structure (Sec. 48E) and will be open to other technologies deemed zero emissions. Initial guidance can be found here.

Commercial Building Energy Efficiency Tax Deduction (179D)

Commercial Building Energy Efficiency Tax Deduction (179D) – Now offers up to $5.81/sq. ft. for commercial building retrofit/new construction that improves energy efficiency by 25% or more.

Tax Cuts & Jobs Act of 2017

Tax Cuts & Jobs Act of 2017: Temporarily expanded bonus depreciation of 80% for eligible projects completed between Jan. 1-Dec. 31, 2023 — reduced by 20% each subsequent year through Jan. 1, 2027.

Stackability

“If we receive funds via the Inflation Reduction Act, can we also accept other funding?”

In addition to federal funding many states, cities and local utility providers are amplifying the benefits by aligning funds to local regulations. Your Trane team can help identify opportunities to stack benefits and make the most of what you can receive.

Other Funding

“What if parts of our project don’t fall directly under the Inflation Reduction Act?”

With the new emphasis on upgrading building infrastructure, there are lots of grants and favorable loans to help further modernize existing infrastructure throughout the nation. They encourage building electrification and other sustainability efforts by funding solutions that help improve energy efficiency, enhance demand management, incorporate clean energy technologies and help reduce air pollution. Select funding highlights include:

Public/Private Commercial Buildings

$550 million in Energy Efficiency & Conservation Block Grant Program funding for local governments to retrofit commercial buildings to meet updated building codes and improved energy efficiency requirements.

Higher Education Institutions

$10 million to fund new Building Training Assessment Centers’ technical curriculum and program development to train technicians, architects and engineers on implementing building efficiency and resiliency solutions.

Public K-12 Schools

$500 million in grant funding for facilities projects that help improve indoor air quality and energy efficiency via HVAC, lighting, controls and other solutions.

Solutions

Utility Rebates

U.S. electric utilities award customers billions in rebates for improving energy efficiency in buildings every year. Today, existing commercial and industrial building rebate programs offer incentives for installing high-efficiency and electric HVAC technologies (notable for heat pumps and chillers), energy storage, building management systems (controls), lighting and renewable energy solutions.

Rebate Finder

Local Initiatives

What is happening locally?

Municipalities, cities and states are looking at different ways to address the harmful impacts of unchecked energy usage and inefficiencies in mechanical systems. From legislation that restricts emissions in cars, to incentives for buildings to make the change from fossil fuels to electric, the HVAC landscape is changing quickly. We are continually working to help you navigate the evolving market.

Key Resources

Closeup of the documents of the Inflation Reduction Act of 2022. The Unites States Senate passed the Inflation Reduction Act, the climate, tax and healthcare legislation, on Sunday, August 7, 2022.

Trane Geothermal Tax

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Trane TES with Inflation Reduction Act

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Tax Incentive Examples

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