Analysis helps medical center pursue IRA funding

The Ohio State University (OSU) Wexner Medical Center was in the middle of the design for a new, combined medical office building and ambulatory health center in Powell, Ohio, set to open in 2026, when it was approached by Health Care Without Harm and one of its coalition partners, America Is All In, to assess the viability of adding sustainability infrastructure that could receive financial support from the Inflation Reduction Act (IRA).

The White House has celebrated the IRA as the government’s single largest investment in tackling climate change. The funding it affords through grants and tax credits is a potential boon for many health care organizations, but with a program so new and untapped, navigating the process to qualify for these funds can be difficult, explains Lauren Koch, sustainability program manager at OSU. 

“We have our own in-house sustainability standards that are universitywide,” Koch says. “We are very engaged with the design team in talking about possibilities, and through sustainability charrettes we were able to define what our ‘dreams’ are. Doing this analysis helped us look at the potential reality of what it would cost. That meant we had hard choices to make, and that’s where this analysis was helpful. For instance, if we wanted to go with a geothermal system or solar, what parts of the IRA would apply?”

Wexner found that there were two provisions within the IRA that it could choose from: the Investment Tax Credit (ITC) or the Production Tax Credit (PTC). Through the ITC, organizations receive a one-time credit based on the full eligible cost of a clean energy project, while the PTC provides a credit to project owners based on the clean energy produced by their investment over 10 years. 

For its project, Wexner chose to pursue the ITC to potentially offset the upfront costs of three sustainable infrastructures included in the project. It’s also working with its contractors to leverage a provision called 179D, through which a design or construction contractor can accept payment for a sustainability upgrade and then pass a portion of the cost savings to the project owner. 

“This is the topic of the hour,” Koch says. “It’s complicated, complex and not easy to access since these projects tend to have long timelines. We are still in the learning process and would love to hear and learn from others as well.” 

Taking potential IRA funding into consideration, Wexner moved forward with a solar-ready roof design to include the conduits and electrical connections necessary for solar panels and ensure the roof itself could withstand the weight of adding solar panels in the future. The project also includes a heat-recovery chiller and electric vehicle charging stations. 

“The tricky part of this funding is that you don’t see any of these credits until the year your building goes into service,” Koch says. “Our project isn’t opening until 2026, so with this case study, we are learning in real time.”