Senior living communities could be able to cash in on energy efficiency improvements through last year’s Inflation Reduction Act.
Signed into law last August, the IRA ushered in more than $400 billion in new federal spending. The act aims to invest in energy production and manufacturing and reduce carbon emissions by approximately 40% by 2030.
During an Argentum Advocates webinar on Thursday, representatives from tax specialists Foley-Hoag LLP in Boston reviewed the opportunities created by the IRA and considerations for senior living owners and operators in applying for those credits.
Among the tax credits and incentives potentially applicable to senior living are projects including solar power and lighting systems, hot water systems, clean vehicles and electric vehicle charging stations, and heating, ventilation and air conditioning systems.
The IRA included a “once-in-lifetime” expansion and extension of government programs aimed at promoting clean energy technology, manufacturing and innovation, according to Nicholas Romanos, a Foley Hoag partner.
Romanos said that eligibility requirements and application procedures still need to be released by federal and state agencies, but the good news is that the program put in place a timeframe of 10 to 15 years, a big difference from past renewable energy credits that relied on year-to-year extensions and could end at any time.
“Not only is it this broad range of technologies and improvements in things you can do to qualify for the incentives, but it really changed the way you can monetize the tax credits,” Romanos said, adding that he expects much guidance to roll out over the next year or two.
Many of the programs apply to low- and moderate-income affordable housing providers, and some come with prevailing wage and apprenticeship requirements.
Along with building improvements and investments, providers also could take advantage of tax credits on commercial clean vehicles and electric vehicle charging stations in low-income or rural areas, as well as weatherization and energy efficiency projects and equipment purchases.
In some cases, funding will flow through states, which means each state will have its own program requirements in addition to the federal requirements. To date, no funding has been awarded to states, because the federal government has yet to release specific guidance on specific programs.
Senior living industry advocates have said that the IRA does not address the affordable housing and homelessness challenges faced by some older adults and that many of the provisions will be phased in over time, leaving older adults waiting years to feel the effect.