§45L Energy Efficient Home Credit

What is the §45L Credit?

The Inflation Reduction Act of 2022 improved the §45L Energy Efficient Home Credit originally created under The Energy Policy Act of 2005. Under the improved program, the qualifying homes must be Energy Star certified; and if qualified, may receive a tax credit of up to $5,000.

EnergyStar with Prevailing Wages
Zero Energy Ready
Zero Energy Ready with Prevailing Wages
$ 500
$ 2,500
$ 1,000
$ 5,000
$ 2,500
$ 5,000

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What is Energy Star?

ENERGY STAR. It’s the little label with the big message: Better is Better.

Green Summit Engineering is proud to provide rating services to certify new homes and apartments to earn the ENERGY STAR® label. The ENERGY STAR label on a home means that it has been designed and built to standards well above other homes in the market today. It means better quality, better comfort, and better durability. It also means that the home is a better value for today, and a better investment for tomorrow. The ENERGY STAR label gives homeowners the peace of mind that their home has undergone a better process for inspections, testing, and verification to ensure that it meets strict requirements set by the U.S. Environmental Protection Agency (EPA).


Peace of Mind. The result of a home that’s built better.

With the ENERGY STAR label on a new home or apartment, homeowners and building owners can be confident that it will deliver. When ENERGY STAR requirements are applied to new home construction, an integrated approach to design combined with tried-and-true best building practices adds up to a durable, comfortable home with reduced utility and maintenance costs. All ENERGY STAR certified homes and apartments have undergone more inspections and testing than typical homes to ensure that they are built to higher standards.

Enduring Quality. Better systems make all the difference.

Purchasing a new home is a big investment, so it’s important to be sure that it’s built to last. We ensure that builders of new ENERGY STAR certified homes and apartments have designed them to include value-adding energy efficiency features, and a combination of materials and equipment that will deliver better performance.

ENERGY STAR certified new homes and apartments include features like:

• A complete Thermal Enclosure System that includes comprehensive air sealing, quality-installed insulation, and high-performance windows, to deliver improved comfort and lower utility bills.
• A high-efficiency Heating, Ventilation, and Cooling System that is designed and installed for optimal performance.
• A comprehensive Water Management System to protect roofs, walls, and foundations from moisture damage.
Energy-efficient Lighting and Appliances to help keep utility bills low, while providing high-quality performance and longevity.

Wall-to-Wall Comfort. A better way to live.

Ask anyone who lives in an ENERGY STAR certified home to go back to their old home. They’ll likely say there’s no way they’ll give up the comfort that came with the ENERGY STAR label on their new home. From the moment you walk in the door of an ENERGY STAR certified home or apartment, you’ll see, feel, and hear the difference.

Proven Value. A better investment for today and tomorrow.

Homes and apartments earning the ENERGY STAR label offer better energy efficiency and performance compared to other homes, making them a better value for today and a better investment for tomorrow. ENERGY STAR certified homes and apartments are at least 10% more energy efficient than homes built to code and achieve a 20% improvement on average.

Learn more about ENERGY STAR certified new homes and apartments at www.energystar.gov/newhomes

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Who can take the credit?

Contractors and builders. The IRS defines “eligible contractors” as the person or organization that constructed the qualified energy efficient home. For purposes of §45L, a person (i.e., an individual, a trust, an estate, partnership, association, company or corporation) must also own and have a basis in the qualified energy efficient home during its construction to qualify as an eligible contractor with respect to the home.

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Energy Efficiency requirements are tied to the EnergyStar program for Multifamily New Construction or Single Family Home New Construction programs. Check with us to determine what requirements will be required for your project.

The efficiency threshold requires a 50% reduction (30% for manufactured homes) in expected energy and power costs relative to a reference building determined based on 2006 IECC energy standards. The 50% energy reduction is based solely on HVAC and building envelope, additionally the building envelope must account for 10% of the energy reduction.

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What Types of Buildings Can Qualify?

• Affordable Housing
• Apartment Buildings
• Assisted Living Facilities
• Manufactured Homes
• Production-Home Developments
• Residential Condominiums
• Student Housing

Qualifying Property

• Freestanding single-family home, townhouse, manufactured home, condominium or apartment unit. Each unit within an apartment or condominium complex is eligible for a separate credit.

• Qualifying properties must be sold or leased during the tax year the credit is being claimed.

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Older Properties

• Contact us to find out what incentives may be available to your property placed in service prior to 2023.

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