Tax credits

The Inflation Reduction Act: Big Savings on Energy Efficiency

The Inflation Reduction Act (IRA) is investing an unprecedented $369 billion into energy-saving programs through tax credits. Homeowners and builders can benefit from lower energy bills, improved comfort, and enhanced energy efficiency.

Even better – these federal tax credits can be stacked with local incentives for maximum savings.

What’s Covered by the IRA Tax Credits

• Residential retrofit incentives
• New and retrofit commercial incentives
• New home incentives
• Efficient building envelopes supported by updated building codes

Residential Retrofit Incentives

The previous law’s credit has been restored through 2022, with enhanced credits available from January 1, 2023 through December 31, 2032:

• 30% credit on insulation and air sealing materials, up to $1,200 per year
• Credit is available every year, not just once
• Home energy audits covered up to $150

New Home Incentives

Builders can take advantage of valuable credits when constructing energy-efficient homes:

• $2,500 builder credit for single-family homes meeting ENERGY STAR Version 3.2 and 2021 IECC prescriptive envelope standards
• $5,000 builder credit for homes meeting the DOE Zero Energy Ready Home standard
• Multifamily unit credits of $500 or $1,000, increasing to $2,500 or $5,000 when prevailing wage requirements are met

Like retrofit credits, the previous law’s credit applies through 2022, with enhanced credits running from January 1, 2023 through December 31, 2032.

The Bottom Line

There are many ways to take advantage of these incentives, and programs may evolve over time. Tax credits are a powerful tool for saving money while upgrading efficiency.

Our team is here to answer your questions and help you make the most of the IRA opportunities.