EPAct 45L TAX CREDITS FOR 2022 AND BEYOND

The US Government has passed into law The Inflation Reduction Act. In it is included an extension to the new home construction Federal Tax Credits. There is good news and bad news regarding the extension….

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Good News

GOOD NEWS – has been retroactively extended for houses completed and acquired in 2022 unchanged from the previous year’s qualifications (for $2000 tax credit). After that there is a 10 year extension, that’s good and the tax credit amounts are slightly higher but the qualifications are stricter 2023 and beyond, which leads me to the

Not So Good News

NOT SO GOOD NEWS – the minimum qualifier for houses completed and acquired in 2023 and beyond will be The Federal Energy Star Homes certification for $2500, and an additional level of DOE Zero Energy Ready certified which is $5000 (note that Energy Star is a pre-qualifier for DOE). So significantly more difficult to achieve.

What does it take to get Energy Star Certification?

Remember not to be confused with the Wisconsin Focus on Energy program. That program and its incentives should remain the same in 2023.

Energy Star has a ton of info on the website and in their qualifications checklists, but let me give you a quick bullet-point list of SOME OF what it takes. If you are intrigued let me know and we can discuss in greater detail:​

HERS Index

More strict HERS Index means more building envelope insulation levels. Somewhere, anywhere, but more. Going to be really hard to meet Energy Star building efficiency protocol with R5 basements, for instance

Air Sealing

Top Plate Air Sealing: There are other ways to do this but the way I see it done most is closed cell foam shooting the air leaks from the attic after drywall but before blown insulation.

Insulation

Continuous insulation sheathing or  Advanced framing

Fireplaces & Showers

Fireplaces and Showers: basically batt and stapled up poly alone is not enough. Could rock or OSB in addition to batt/poly, or closed cell foam insulation works.

Windows

All windows U=0.27 or less.

And More...

There’s more but those are the more difficult or pricey mandatory features of an Energy Star certified home. Interesting though for some of you it might not be a huge jump to go from Energy Star to DOE certified and double your tax credit to $5000. That would take some solar-ready features and maybe a little more beefed up building envelope than Energy Star.

HVAC

HVAC Loads and Commissioning are required. Biggest thing here is HVAC needs to test out and document the installed systems, and become credentialed Energy Star HVAC contractors.

Duct Sealing

Duct Sealing is mandatory, not just if some or all is in the attic, but ALL the ductwork. And the criteria to pass is fairly challenging, so the ducts need to get sealed really well. I’ve been working with builders who have dabbled in Energy Star already and this item has been an issue for sure.

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