The Inflation Reduction Act (IRA) is directing an unprecedented $369 billion toward energy saving initiatives through tax credits. These tax credits will have numerous benefits including improved energy efficiency, reduced energy bills, and improved home comfort.
These tax credits can be combined with local incentives for even bigger savings! IRA tax credits include:
- Residential retrofit incentives
- New and retrofit commercial incentives
- New home incentives
- Efficient building envelopes through building codes
Here are some key points from the Act.
Residential Retrofit Incentives
- Previous law’s credit restored through 2022. Enhanced credit amount applies from January 1, 2023 to December 31, 2032
- 30% of insulation and air sealing materials up to $1,200 (per year)
- Credit available on a yearly basis
- Home energy audits covered up to $150
New Home Incentives
- Builder credit of $2,500 for single family homes that meet ENERGY STAR Version 3.2 and meet 2021 IECC prescriptive envelope standards
- Builder credit of $5,000 for homes that meet DOE Zero Energy Ready Home standard
- Builder credit of $500 / $1,000 for multifamily units, with incentives increasing to $2,500 / $5,000 when meeting prevailing wage requirements
- Previous law’s credit restored through 2022. Enhanced credit amount applies from January 1,2023 to December 31, 2032
There are many components to this act and many ways you can save, and tax credits are subject to program changes. Our team is happy to answer questions. Contact our office to discuss your project and how tax credits can help.