How to Save Money Building Energy-Efficient Homes

Oct, 2023

The Inflation Reduction Act of 2022 (IRA) is a big piece of legislation that’s meant to help reduce inflation and invest in clean energy. It also includes some tax incentives for home builders who build energy-efficient homes.

The most significant incentive is the Energy Efficient Home Credit (Section 45L), which allows builders to claim a federal tax credit of up to $5,000 per home. It’s available for homes that are certified to meet ENERGY STAR or Zero Energy Ready Home standards.

Here are some specific things that home builders can do to make their homes more energy-efficient and qualify for the 45L credit:

• Insulate the home properly.
• Install energy-efficient windows and doors.
• Seal air leaks around the home.
• Install energy-efficient appliances and HVAC systems.
• Use renewable energy sources, such as solar panels or geothermal heating and cooling.

If you’re not sure whether your homes meet the requirements, you can contact a certified energy rater for help. Energy raters can inspect your homes and provide you with a certificate of compliance if they meet the standards.

Once your homes are certified, you can file for the tax credit using IRS Form 8908. The credit is available for homes that are placed in service between January 1, 2023, and December 31, 2032.

I encourage you to learn more about the tax incentives available through the Inflation Reduction Act. These incentives can help you save money on the cost of building energy-efficient homes and make your homes more attractive to potential buyers.

Learn more: https://www.irs.gov/forms-pubs/about-form-8908