Contractors Securing Work with the 45L Tax CreditKevin Dugan
As the weather gets warmer, residential projects increase. It’s an annual business opportunity for contractors to grow revenue and expand their customer base. And in 2021, the 45L Tax Credit is an important tool that can help them reach these goals.
Created to support the residential construction industry during the pandemic, the 45L Energy Efficient Home Tax Credit is a $2,000 tax credit per dwelling unit. It can be claimed by builders and developers achieving a 50% energy savings for HVAC over the 2006 IECC Code and supplements. And as part of these energy savings, each building envelope must see improvements that account for at least 10% of this reduction.
Tax Credit Extended through 2021
In December of 2020, the 45L Tax Credit was extended through the end of 2021. It applies to the new construction and renovation of single-family residences as well as multi-family units in buildings up to three stories. It is also retroactive, meaning builders may be able to apply it to previous projects that meet these requirements.
“Aeroseal and AeroBarrier offer builders the shortest path to achieve a 50% reduction in energy consumption.”
— Jarrod Scott
An Opportunity for Contractors with Duct Sealing and Air Sealing
Contractors providing duct sealing and air sealing services should use this credit to their advantage when working with builders on pricing.
“Aeroseal and AeroBarrier offer builders the shortest path to achieve a 50% reduction in energy consumption,” said Jarrod Scott, National Director for Aeroseal, LLC. “LED lighting is another obvious choice, but it won’t save as much energy when compared to duct sealing and air sealing.”
How to Get Started
The 45L Tax Credit joins a growing list of potential energy-saving credits and utility rebates designed to encourage builders to build energy-efficient homes. Contractors focused on HVAC, insulation, or drywall, and energy raters can all become more competitive by understanding how their work will qualify projects for these incentives.