The Inflation Reduction Act, signed by President Joe Biden on August 16, paved the way for more energy-reduction rebates, including offering credits and incentives to new home builders. The installation of specific types of HVAC equipment and components, such as the Rheia air distribution system, falls under the enhanced 45L credits, as Rheia brings ducts into the conditioned living space.
One section of the approximately $737 billion measure is the 45L tax credit which incentivizes homebuilders to deliver more energy-efficient homes. The use of prescribed building practices, such as those required by the Rheia air distribution system, falls under these enhanced credits. Rheia’s technology enables the cost-effective installation of ducts inside the thermal envelope, significantly contributing to the home’s energy efficiency and directly benefitting the homeowner’s operating costs.
Builder Rebate Credits Granted Through 2032 with the Inflation Reduction Act
Extended through 2032, new home builders can utilize 45L credits on single-family, multifamily, and mobile-home dwellings. To receive builder rebates, homes must be built to standards determined by the Department of Energy (DOE) Energy Star guidelines:
• 2,500 per home, if the home meets the eligibility standards of the EPA’s ENERGY STAR Single Family New Homes Program
• Homes that are certified to meet the DOE’s Zero Energy Ready Home program will qualify for a $5,000 tax credit.
A zero-energy ready home is outlined as having energy efficiency levels that would allow a renewable energy system, such as solar panels, to offset the yearly energy consumption.
Multifamily Units Are Allowed Additional Builder Credits Under Inflation Reduction Act
Multifamily units also benefit from a $500 credit for each unit meeting minimum standards. Additionally, zero-energy ready unit incentives will be $1,000 per unit. These credits can be combined with wage and apprenticeship requirements, allowing builders of multifamily projects to receive credits of up to $2,500-$5,000 per unit.
“At Rheia we make sure builders can access incentives and rebates for energy-efficient HVAC solutions,” said Rheia CEO Alan Laing. “Our air distribution exceeds current code standards, which makes it easy for builders to get approved for the builder credits and rebates.”