Enacted in 2022, the Inflation Reduction Act (IRA) directed close to $400 billion toward climate and energy-efficiency initiatives. This unprecedented legislation incentivized building owners and architects to pursue high-performance, energy-efficient construction and upgrades.
While some opportunities remain intact, the One Big Beautiful Bill, enacted in July 2025, is phasing out several key incentives—most notably those tied to the Energy Efficient Commercial Buildings Tax Deduction (Section 179D).
The Evolution of 179D
In January 2023, Section 179D was expanded to make qualification easier while increasing potential benefits. Rather than requiring a 50% energy reduction for a one-time deduction of up to $1.88 per square foot, the threshold was lowered to a 25% improvement over a baseline building.
In addition, project teams could apply for the incentive every three years, with deductions scaling up to $5 per square foot for projects that met prevailing wage and apprenticeship (PWA) requirements.
These changes encouraged a wide range of lighting, HVAC and building envelope projects to leverage the savings, driving investment in energy-efficient design for both new construction and retrofits.
However, the newer legislation is now phasing out Section 179D. While projects already under construction can still pursue the deduction, those breaking ground after June 30, 2026, will no longer qualify.
To remain eligible, projects must demonstrate that meaningful physical work has begun or that a significant portion of costs has been incurred, along with continued progress toward completion. Activities such as planning, permitting or design alone are no longer sufficient.
Projects currently underway must still meet all performance and compliance requirements established under the IRA, including energy modeling, certification and adherence to PWA standards.
The Role of the Building Envelope
A key component of IRA-related projects is the building enclosure. Because envelope performance directly impacts heating, cooling and lighting demand, improvements in glazing, insulation and façade design play an essential role.
High-performance envelope systems support daylighting, improve thermal efficiency, enhance occupant comfort and reduce overall energy use.
While IRA-specific incentives are phasing out, their influence will persist. The legislation has reshaped expectations across the commercial building sector: energy efficiency is now a baseline requirement rather than an optional upgrade.
At the same time, increased focus on low embodied carbon (LEC) materials and transparent product data continues to influence procurement decisions—particularly in public-sector and large-scale commercial projects.
Even as tax incentives evolve, the standards they promoted are becoming embedded in building codes, corporate sustainability targets and owner expectations.
Broader Impacts on Materials and Procurement
Beyond Section 179D, the IRA continues to influence material selection and project planning—particularly for architectural glass.
Provisions supporting domestic manufacturing and supply chain resilience have encouraged greater use of U.S.-produced materials. Domestic content requirements tied to energy incentives can further favor products manufactured locally.
At the same time, federal funding programs and procurement standards have elevated the importance of low embodied carbon materials, lifecycle transparency and verified environmental performance.
While high-performance glazing products do not typically qualify directly for tax credits, they play a complementary role in helping project teams meet broader energy, carbon and compliance goals shaped by IRA-driven policies.
Solar Investment Tax Credit
As part of the IRA’s focus on renewable energy, the Solar Investment Tax Credit (ITC) was originally expanded to provide a stable, long-term incentive for solar adoption. Under that framework, eligible projects could claim a 30% tax credit for photovoltaic installations through 2032, followed by a gradual step-down.
However, the recent legislation has significantly altered that timeline. For projects to remain eligible, they must either begin construction by July 4, 2026, or be placed in service by December 31, 2027. Projects that do not meet one of these conditions will no longer qualify for the credit, regardless of performance or efficiency.
While the base credit structure remains, achieving the full 30% value increasingly depends on meeting prevailing wage and apprenticeship requirements.
Although the credit applies primarily to solar generation equipment—such as rooftop or façade-mounted photovoltaic systems—high-performance glass products like Solarban® low-e glass remain valuable complementary elements. Low-e glass improves overall building efficiency and helps to optimize the performance and economics of solar installations.
Looking Ahead
The Inflation Reduction Act (IRA) remains an important reference point for understanding today’s energy-efficient construction landscape. In the near term, it continues to offer meaningful opportunities for projects already underway.
Looking beyond current incentives, its long-term impact is clear: higher performance expectations, increased demand for high-efficiency materials and a continued focus on reducing the environmental impact of the built environment.
For those involved in commercial building design and construction, the takeaway is straightforward: while policy timelines may shift, the move toward higher-performing buildings—and the central role of the building envelope and high-performance glass—is here to stay.
For more information on Vitro’s suite of high-performance glass products, visit
https://www.vitroglazings.com/products/.
Image credits:
- Project Name: Nemours/Alfred I. DuPont Hospital for Children
- Location: Wilmington, DE.
- Architect: FKP Architects, Houston
- Owner: Nemours Foundation
- Glass Fabricator: Cristacurva, Oldcastle BuildingEnvelope®
- General Contractor: RA Kennedy
- Glazing Contractor: Skansa
- Photography: Tom Kessler
Updated on June 19, 2026
