Cash in on Tax Credits for New Home Construction

The recent passing of the Inflation Reduction Act (IRA) solidified long-term opportunities for homebuilders to earn significant tax credits by improving the energy efficiency in new single- and multi-family homes. Federal tax credit 45L — the New Energy Efficient Home Credit — targets new homebuilders and is verified under the ENERGY STAR^® New Home Construction and Net Zero Ready certification programs. Aeroseal^® duct sealing and AeroBarrier envelope solutions are among the most energy-efficiency, cost-effective and high-value levers homebuilders can pull to capitalize on 45L. 

For new homebuilders, it’s important to understand that 45L is not just another deduction on their annual income taxes; it’s a true, money-back tax credit. The IRA established a 10-year length for the incentive program, ensuring a decade of opportunity and ample time for homebuilders to develop and implement proven certification strategies.  

As you can see, the updated 45L tax credit raises the incentive baseline for ENERGY STAR certification to $2,500. The previous baseline was $2,000. For homebuilders working toward Net Zero certification in new homes, the tax credit is even more substantial at $5,000 per single-family home and/or multi-family unit (with prevailing wage). 

Building a high-performance home is a multi-faceted process. Air sealing is one of the many options in ENERGY STAR’s list of energy-efficient home construction strategies, which include tightening the home envelope and sealing HVAC ductwork. Other options include installing high-performance fenestration/insulation, reducing thermal bridging with alternative construction strategies, and selecting high-efficiency heating and cooling equipment.  

AeroBarrier building envelope and Aeroseal duct sealing solutions are among the most cost-effective of these options, helping to deliver significant performance improvements and raise your home energy rating system (HERS) score. 

• Aeroseal automatically finds and seals all HVAC duct air leaks, delivering up to 95% reduction in duct air leakage.  
• AeroBarrier is an automated, proven, and verifiable process designed to meet your air change per hour (ACH) rating requirements.  

Both solutions integrate seamlessly into new home construction processes without disrupting your standard production schedules and/or practices.  

Navigating the ENERY STAR certification process 

As you know, qualifying for ENERGY STAR requires certification from an accredited Energy Professional working under an ENERGY STAR approved Home Certification Organization (HCO). From our experience working with national homebuilders, most new home construction already meets up to 75% of program requirements. With Certified Energy Professionals on staff, Aeroseal welcomes the opportunity to show you how to close the gap on the last 25%.  

Our experts are available to help you untangle the regulatory red tape, decide which efficiency levers to pull and provide consultation about: 

• Rater introductions 

• Energy modeling 
• Project value engineering 
• Compliance methods 
• Incentive program qualification 

Compared to other options along the path to high-performance homes, Aeroseal solutions deliver foundational, proven and lower-cost strategies for achieving energy-efficiency certifications. Please contact your Aeroseal sales representative to schedule a meeting with our home construction air sealing experts. To learn more about qualifying for ENERGY STAR and cashing in on 45L tax credits, please view our in-depth webinar. We look forward to helping you achieve tax credits and take the next steps on your journey.