A look under the hood of the IRA

During a recent event, Omer Farooq, Head of Sustainable Asset Finance, Bank of America, explained key elements of the Inflation Reduction Act. Watch to learn about a sea change for businesses small, medium and large

Thinking a decade ahead is no easy feat in the business world. Changes in policy, climate, markets, technology and more can quickly upend carefully conceived plans. Which is why the Inflation Reduction Act (IRA) is such a unique and significant opportunity for companies across many industries. Touching nearly all parts of the global economy, the IRA provides dependable, stable incentives for clean energy and decarbonization solutions through at least 2032. With more than $700 billion at stake, the opportunities are significant, but making sense of them is not a straightforward exercise.

“We’ve had more than 23,000 sustainability conversations with our clients this past year,” says Matt Elliott, Sustainability Executive, Business Banking and Global Commercial Banking, Bank of America. “One of the most common themes that comes up is Net Zero and what to do about it — so the Inflation Reduction Act couldn’t be more relevant, or more in need of explanation.”

While there are numerous takeaways from the Act, Omer Farooq, Head of Sustainable Asset Finance in the Global Sustainable Finance Group at Bank of America, explains three critical elements of the IRA:

Tax credits (based on the commodity (such as energy) produced and sold)
Investment tax credits (based on the qualified investment in the project and generally equal 30% or higher of the qualified investment depending on certain conditions)
Transferability, which allows an eligible taxpayer to either buy or sell certain tax credits, giving businesses another monetization route.

Additionally, The Inflation Reduction Act: A Long Game outlines the regulatory policies, critical timetables and business benefits the law offers. To learn more about how major trends — including renewable energy becoming the mainstream energy of the future — are shaping the years ahead, visit the Bank of America Institute for similar insights and expertise.

IMPORTANT DISCLOSURES

Opinions are as of the date of this webcast [05/16/2023] and are subject to change.

The views and opinions expressed are those of the speaker, are subject to change without notice at any time, and may differ from views expressed by Merrill or other divisions of Bank of America.

Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.

These materials are provided for informational purposes only. The information is not a complete statement of the tax and legal requirements necessary to obtain benefits under the law. The information should not be used or construed as a recommendation of any service, security or sector. This video does not constitute and is not intended as a recommendation and/or an offer or the solicitation of an offer to buy any securities, purchase or sell any financial instrument, equity product or other investment, or as an official confirmation of any transaction or a recommendation for any investment product or strategy.

Sustainable and Impact Investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.

“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, BofA Securities, Inc. and BofA Securities Prime, Inc., which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.

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