The recently passed and signed into law Inflation Reduction Act offers a host of incentives for improving building envelopes and home energy efficiency. In part, these incentives offer consumers the ability to save $1,200 per year to invest in their personal building envelopes and save money on their home energy bills. The “25C” tax credit includes credit for improving your home’s insulation, including through the use of spray foam insulation (SPF). When compared to other forms of insulation, SPF has one of the lowest greenhouse gas emissions and emits up to 80% less GHG emissions over the life of the building.
The 25C provision in the new law encourages homeowners to use materials like SPF to lower energy use and costs through enhanced tax credits:
– Funding: Up to 30% of installation costs, or $1,200, up from 10% of costs or $500.
– Accessibility: The lifetime cap is removed, meaning homeowners can claim $1,200 every year.
– Compliance: The insulation must be installed per the 2021 IECC, regardless of the local code.