Structural Insulated Panels Help Builders Meet Tough Energy Codes
The vast majority of builders in the U.S. now face demanding energy codes. Learn more about those energy codes on our blog..
The Federal Government has unveiled three impressive federal tax incentives for commercial and residential construction. These federal tax incentives are either in the form of directly paid tax credits or federal tax deductions and are designed to financially motivate the AEC industry to responsibly build structures that operate with much less energy consumption. [Bonus: when Premier SIPS are chosen, these high performing buildings are also stronger and healthier.] With buildings accounting for more than 40% of energy consumed and emitted, it is no wonder that 2023 IRA Federal Legislation took aim at this simple approach to reducing energy consumption through the built environment.
While lucrative tax incentives spotlight the opportunity to leave a legacy with sustainable building choices, the practice of energy efficient construction isn’t new to many professionals who have proactively been building and designing structures this way for decades with Premier SIPS construction. Since energy efficient SIPs construction isn’t new, expensive, or difficult, earning these tax incentives can easily be achieved and can significantly benefit both a project budget and energy resource consumption for the future of our planet. Note: The following is a guide only and should be verified by a tax professional.
Read on for details and a breakdown on each, and the efficiency opportunities you can achieve when building with Premier SIPS!
The Energy Efficient Home Credit update from the 2023 Inflation Reduction Act [IRA] offers the following projects updated tax credit options:
Residential 45L Tax Credit Amount Guide |
||
Residential Home Type |
Energy Efficiency Qualification Requirement |
Credit Per Dwelling Unit: 2023-2032 |
Single Family |
$2,500 |
|
Single Family |
Zero Energy Ready Home: DOE’s Zero Energy Ready (ZERH) Program |
$5,000 |
Manufactured Home |
$2,500 |
|
Manufactured Home |
Zero Energy Ready Home: DOE’s Zero Energy Ready (ZERH) Program |
$5,000 |
The Energy-Efficient Commercial Buildings Tax Deduction (Consolidated Appropriation Act [CAA] and Inflation Reduction Act [IRA]) offers new construction commercial building projects of all types and sizes with new significant advantages to design and construct with energy efficiency in mind.
Commercial 179D Tax Deduction Amount Guide |
|||
Project Meets Prevailing Wage & Apprenticeship Requirements ($0.10 per 1% improvement) |
Project DOESN’T Meet Prevailing Wage & Apprenticeship Requirements ($0.02 per 1% improvement up to $1.00 sf) |
||
25% Energy Improvement |
$2.50 sf |
25% Energy Improvement |
$0.50 sf |
40% Energy Improvement |
$4.00 sf |
40% Energy Improvement |
$0.80 sf |
50% Energy Improvement |
$5.00 sf |
50% Energy Improvement |
$1.00 sf |
The combination of these two credits and deduction for multifamily projects is simply enormous. The Builder/Owner can take the residential business per unit tax credit (45L) AND the commercial per sq foot incentive for the owner, leaseholder, or eligible designers. This package truly is designed to help meet the needs of a massive housing shortage (and affordability crisis) as well as improve energy efficiency in our buildings… and lower energy costs further contributes to lower housing costs for renters/occupants. This truly is a win for so many seeking to build and live in more affordable, environmentally responsible spaces, with significant extra tax perks along the way.
Multifamily (Commercial 179D) Tax Deduction Guide |
|||
Project Meets Prevailing Wage & Apprenticeship Requirements ($0.10 per 1% improvement) |
Project DOESN’T Meet Prevailing Wage & Apprenticeship Requirements ($0.02 per 1% improvement up to $1.00 sf) |
||
25% Energy Improvement |
$2.50 sf |
25% Energy Improvement |
$0.50 sf |
50% Energy Improvement |
$5.00 sf |
50% Energy Improvement |
$1.00 sf |
Multifamily Residential 45L Tax Credit Amount Guide |
||
Qualification Requirement |
Credit Per Dwelling Unit 2023-32 |
|
No |
$500 |
|
Zero Energy Ready Home Program Standards |
No |
$1,000 |
Yes |
$2,500 |
|
Zero Energy Ready Home Program Standards |
Yes |
$5,000 |
The federal incentives for new construction are available to the entire country, but the incentives don’t stop there. Each State, and many County, City, and Utility Districts offer additional energy saving rebates and incentives for choosing energy efficient thermal envelopes like those created with Premier SIPS. A little legwork can earn your project thousands of rebates and incentives. Check with your regional districts or search yourself for energy incentives at the Database of State Incentives for Renewables and Efficiency or by searching for “New Construction Energy Efficiency Rebates” in your favorite web browser. And always remember to consult a tax professional to verify details for your specific projects.
When you design and build with Premier SIPS you are choosing the easiest and most efficient path to tax incentives. Be sure to take advantage of designing and building your projects with a superior performing thermal SIPS envelope.
As always, local Premier Representatives are ready and available to help you switch to SIPS and take advantage of these generous energy efficiency tax incentives, while delivering a superior structure that you can be proud of.
The vast majority of builders in the U.S. now face demanding energy codes. Learn more about those energy codes on our blog..
The U-Factor Method is the most accurate for determining performance values. This Premier Tech Talk explains the U-Factor..
Does it cost more to build green? Only in the short term! Read our blog to discover the cost benefits of building green..
As the oldest manufacturer in the SIPs industry, Premier’s SIP system is the proven prefabricated building envelope framing system for your next commercial or residential structure. Faster, stronger, and greener than outdated lumber framing methods, SIPs are the future of framing. Join the other thousands of structures built with SIPs, and contact the expert in your local region to get started.