Tax Credit Updates Every Industry Pro Should See

If you’re an architect, builder, or developer working with energy-efficient systems like Structural Insulated Panels (SIPs), the latest federal legislation could mean major benefits for your next project. The Reconciliation Bill signed in July 2025—dubbed the “Big, Beautiful Bill”—is shaking up the lineup of energy-related tax credits for both residential and commercial construction.

With new incentives, revised eligibility, and expanded potential for cost savings, now is the time to get ahead of the curve.
We’ve broken down what’s changing—so you can design smarter, build more efficiently, and capture every available credit.

What’s Changing for Residential Projects

Several key residential energy tax credits are now scheduled to expire, reducing the range of incentives available for energy-efficient homes starting in late 2025.

• Section 25D – Residential Clean Energy Tax Credit
  Will expire December 31, 2025. This credit covered solar, geothermal, and other renewable technologies used in residential construction. Construction must be complete and the project occupied by the end of 2025.  
  
  
• Section 45L – New Energy Efficient Home Tax Credit
  Now expires June 30, 2026. This credit provided $2,500–$5,000 per qualified energy-efficient home (depending on ENERGY STAR or Zero Energy Ready standards), and was one of the most widely used by SIP builders and developers. Construction must be complete and the project occupied by June 30th, 2026.
  
  
• Section 48E – Clean Electricity Investment Credit
  Eliminated for properties not placed in service by December 31, 2027.
  
  

While these changes don’t eliminate all support for residential sustainability, builders targeting tax credit eligibility should act soon to finish projects before these deadlines.

⇒ Read NAHB’s full summary here:  Expiring Energy Tax Credits – NAHB

What’s Staying the Same for Commercial Projects

The Section 179D Commercial Building Energy Efficiency Deduction remains in place—for now. It allows building owners, leaseholder, or eligible building designers or government-owned buildings to claim a deduction for qualifying energy-saving systems like SIP building envelopes. 

• This tax deduction is $.50 to $5.00 per square foot. The amount per square foot is based on whether or not Prevailing Wage and Apprenticeship requirements are met under Section 45(b)(6)(B)(ii). 
• 179D is set to expire June 30, 2026.
  

Premier SIPS have consistently qualified for 179D on the higher end of energy savings ($2.50-$5.00 sf) due to their energy performance and continuous insulation. If you’re building commercial, educational, healthcare, or government projects, this deduction still offers meaningful value.

⇒ For a refresher on how SIPs qualify:  Read Our Guide to SIP Tax Incentives

Impact on Multi‑Family & Low‑Income Housing

In addition to residential and commercial changes, the bill also updates incentives for multi-family housing. The 45L New Energy Efficient Home Tax Credit, which applies to multi-family units, will still sunset June 30, 2026—new projects must be completed before then to qualify.

However, the Low-Income Housing Tax Credit (LIHTC) receives a permanent 12 % increase in the 9% allocation and a lower Private Activity Bond financing threshold (from 50 % to 25%), effective 2026–2029. This means, that even though the individual residential dwelling unit credit for builders is going away, multi-family developers building affordable housing will have more tax credits available—and easier access to them.

⇒ Read more about how this update impacts developers in Builder Online's full breakdown of the bill.

ENERGY STAR Still in Place—for Now

ENERGY STAR funding was not impacted by the Reconciliation Bill. The program continues to be supported at the federal level—though future appropriations will need to be renewed.

For projects seeking ENERGY STAR certifications (including homes that qualify under the 45L credit), it’s still a viable and important program.

However, federal funding for ENERGY STAR beyond FY2025 is still being determined as part of the federal budget process.

What This Means for SIP Builders and Designers

While the updates do shorten the timeline on some credits, SIPs remain a smart solution for projects that prioritize performance and efficiency. Many tax credits are still active through 2025–2026, giving builders time to:

• Finish eligible projects
  
  
• Lock in design choices that meet ENERGY STAR or Zero Energy Ready standards
  
  
• Collaborate early with Premier SIPs for documentation and planning
  
  

Premier SIPs can help you navigate these shifts and identify opportunities while they last.

Tax incentives can help make high-performance building more accessible—but even without them, SIPs offer long-term energy savings, labor reductions, and performance benefits that speak for themselves.

Have questions about how tax credits apply to your project?  Contact your local Premier SIPs Representative for guidance and support.