Inflation Reduction Act: Businesses

Cutting Business Energy Costs for a Greener Future

Though much of the Inflation Reduction Act (IRA) focuses on consumer savings, the legislation also lowers the cost for businesses to invest in clean energy and energy efficiency.

The IRA helps small businesses, multifamily housing developers, and commercial entities get the latest clean energy technologies and equipment that will save energy for years to come. The financial benefits of the IRA can be enhanced with New York State incentives and programs, helping New York businesses use less energy, save more money, and contribute to a cleaner, healthier planet.

How Much Can Businesses Save on Clean Energy?

*Eligible energy efficiency projects include lighting, heating, cooling, ventilation, hot water systems, and building envelope improvements.
**IRA tax credits may not exceed $7,500 for vehicles under 14,000 lbs. and $40,000 for vehicles above 14,000 lbs.
***Property must be in an eligible low-income community or non-urban census tract .
****Low-income bonus is capped at 1.8 GW/year and limited to projects <5 MW

Eligible Clean Energy Technology	Federal IRA Tax Credit 2023-2032	New York State Incentives and Tax Credits
Energy Efficient Commercial Buildings	Tax credit of up to $5 per square foot* for new construction or retrofit project For more information, see the IRS website	Funding for site-specific energy studies Programs and incentives available
New Electric Vehicles (EVs)	Plug-in hybrid EV: 15% of cost** Battery-electric or Fuel cell EV: 30% of cost** For more information, see the IRS website	Up to $2,000 rebate for purchased or leased eligible vehicle
Vehicle Charging and Fueling Stations	30% tax credit (6% base rate with an additional 24% for meeting labor standards), up to $100,000***	Up to $2,000 rebate per charging port at workplaces or multi-unit dwellings. $500 additional incentive per port if located in Disadvantaged Community.
Geothermal Heat Pumps	30% tax credit (6% base rate with an additional 24% for meeting labor standards ) Up to 10% tax credit for domestic content bonus Up to 10% tax credit for energy community bonus Up to 10% tax credit for low-income community bonus Up to $5 per square foot energy-efficiency tax deduction 5-year accelerated depreciation and a 1-year bonus depreciation	Funding for site-specific heat pump studies Programs and incentives  available
Solar	30% tax credit (6% base rate with an additional 24% for meeting labor standards) 10% tax credit for domestic content bonus 10% tax credit for energy community bonus 10% tax credit for low-income community bonus (<5 MW projects)**** 20% tax credit bonus for low-income residential building project / low-income economic benefit project**** For more information, see the IRS website	Tax Credits: Commercial Depreciation Allowance, NYS Real Property Tax Exemption, and NYC Real Property Tax Exemption Financing available Solar incentives available

Investments in Clean Energy Manufacturing

The Inflation Reduction Act allocated $10 billion toward the Qualifying Advanced Energy Project Credit (48C) program . Tax credits through this program support investments to expand clean energy supply chains, especially in designated energy communities .

Eligible investments under the Qualifying Advanced Energy Project Credit include:

• Clean energy manufacturing and recycling
• Critical materials refining
• Processing and recycling of critical materials
• Projects that reduce greenhouse gas emissions at industrial facilities

The Department of Treasury and Department of Energy awarded $4 billion in Round 1 tax credit allocations . A notice for the second round of allocations is expected in 2024.

New York State Helps You Get the Most Out of the IRA

For years, New York’s nation-leading climate actions have included programs to help New Yorkers switch to clean energy options. The IRA does not replace those New York State clean energy programs — it enhances them. New Yorkers can still take advantage of existing State programs to help them save more money, more energy, and get the most out of their IRA incentives.

Explore the options below to find the clean energy opportunity that’s right for you or see the complete list of New York State’s energy-related programs.

How to Claim IRA Tax Credits and Save

The IRA can help businesses reduce the cost of clean energy technologies and energy efficiency improvements through tax credits.

Here’s how it works:

• When you purchase a qualifying clean energy technology, save your proof of purchase to be included with your yearly tax return.
• When you submit your tax return for the year you installed the qualifying technology, work with your tax preparer to indicate that you made a qualifying clean energy improvement to your business and the amount it costs.
• Qualifying credits will be applied to your federal tax return, meaning you will either receive a larger refund or owe a smaller amount, depending on your circumstances. Read the IRS’s guidance on credits and deductions under the Inflation Reduction Act of 2022 or consult with a tax professional to better understand your particular tax situation.

Explore additional federal, New York State, and utility energy programs and incentives for businesses.