Homeowner Savings in the Inflation Reduction Act

Signed into law in 2022, the Inflation Reduction Act or IRA for short, has many different programs for US citizens and businesses. Some of the programs are designed to offer incentives to improve the energy efficiency of homes and commercial properties.

There are three sections currently approved with several others still undergoing rulemaking.

Currently Approved:

Residential Retrofit – 25C

Available to homeowners who have upgraded their insulation or air sealing at their primary residence to meet the prescriptive criteria of the 2021 International Energy Conservation Code.

The tax credit is available on an annual basis and is 30% of the cost of materials up to $1,200 annually, and applies to the cost of insulation and air sealing materials.

New Residential Construction – 45L

Eligible builders or building owners may request a tax credit of up to $5,000 for new or substantially rehabilitated single and multi-family homes that meet certain energy efficiency and prevailing wage requirements.

Eligible taxpayers should refer to the 2022 IRS form 8908 for details on how to qualify and claim the credit

Commercial & Large Multi Family Buildings – 179D

Taxpayers claiming the tax deduction can receive as much as $5.00 per square foot when making energy efficiency improvements above certain thresholds to commercial and certain multi-family buildings.

The tax deductions can be allocated to engineering, architecture, and contractors responsible for creating the technical specifications of a building.

Learn more at owenscorning.com/energyrebates.

The money associated with IRA for sections 25C, 45L, and 179D are federal tax credits or deductions that can be received through annual federal tax filing. Please consult a tax professional for more information.

• 30% of insulation and air sealing materials up to $1,200
• Credit available on a yearly basis
• Home energy audits covered up to $150
• Previous law’s credit restored through 2022. Enhanced 25C credit amount applies from January 1, 2023 to December 31, 2025
  

The easiest and highest return usually starts with adding insulation to your attic. This is typically easy to access and often gives the best return for comfort and energy savings. A complete list of projects can be discussed with your contractor and can include air sealing, adding insulation in your crawl space and potentially your walls.

You can learn more about adding insulation to your home at owenscorning.com/energyrebates.

If you need to hire a professional, we have a network of Certified Energy Experts that are trained, tested, and trusted by Owens Corning and we highly recommend. Find a local contractor.

As energy performance consultants, they’re trained to help optimize comfort, noise control and energy efficiency. As elite insulation contractors, they’re tested to meet the highest standards, delivering advanced solutions based on decades of building science research. As an exclusive group certified by Owens Corning, they’re backed by a limited lifetime warranty on the #1 most trusted brand of insulation* and an industry-exclusive lifetime workmanship warranty† on installation.

Learn more about Certified Energy Experts.

Yes, we recommend using an Owens Corning Certified Energy Expert (CEE) for your project. They have been trained by Owens Corning, complete annual quality assessments, and are backed by a limited lifetime warranty by Owens Corning on the product and workmanship.

Learn more about Certified Energy Experts

There are many reasons to improve the energy efficiency of your home by adding insulation. The main reasons are:

• Improve your comfort in your home – warmer in the winter, cooler in the summer
• Reduce your energy use and utility bills to heat or cool your home
• Improve the resale value of your home – a 2016 study of project cost vs resale value impact showed adding insulation to your attic is the #1 project for return on investment at 117%
  

In some cases there are other rebates available at the state level and sometimes from local energy providers. You can check with those organizations to see if there is any additional money available.

• $4.3 billion to fund DOE-approved state rebate program for performance-based whole home efficiency upgrades
• Rebates available to both individual homeowners and aggregators
  
  - For homes achieving 20-35% modeled energy savings – rebate of the lesser of $2,000 or 50% project cost
  
  - For homes achieving at least 35% modeled energy savings – rebate of the lesser of $4,000 or 50% project cost
  
  - For homes achieving at least 15% measured energy savings – rebate payment rate per kWh saved, equal to $2,000 for a 20% reduction, or 50% project cost
• Multifamily rebates are capped at $200,000 per multifamily building for units that model energy savings of 20-35%; $400,000 for buildings that model savings of more than 35%
• States may increase rebate amounts for low-income housing
• Rebates under this program may not be combined with other federal grants or rebates (but can be combined with the 25C homeowner tax credit)
  

• $4.5 billion for state and rebate programs for home electrification upgrades, including insulation
• $1,600 rebates for insulation, air sealing and ventilation / $14,000 cap on multiple rebates to an eligible entity
• 50% of the cost of insulation up to $1,600 for households with annual incomes of 80-150% of area median income
• 100% of the cost of insulation up to $1,600 for households with annual incomes less than 80% of area median income
• Same conditions apply to multifamily units where 50% of the residents meet the income requirements
• Electric home rebates may not be combined with any other Federal grant or rebate (but may be used in tandem with the 25C tax credit)
• Government, commercial or non-profit entities that receive the rebate and install insulation in a qualifying low-income home may receive an additional $500 for installation
  

• $4 billion in loan authority to fund projects in low-income housing that improve energy efficiency, improve air quality, promote low carbon building materials, or promote building electrification
• HUD may issue direct loans, grants, or convert loans into grants for recipients that agree to an extended period of affordability for the property
• Funding is available through September 30, 2028