Understanding the Impact of the 45L Tax Credit Extension

Despite expiring on December 31st of 2017, the Federal 45L Tax Credit has been retroactively extended through 2018 and 2019 and will continue to be effective throughout 2021.* The credit incentivizes energy efficient homes by giving builders a $2,000 tax credit for building them. There have been no modifications made to the original credit prerequisites and requirements. 

In order to be eligible for the credit, participating homes must:

• Be located in the U.S.

• Haven been substantially built while the Tax Credit has been effective

• Meet these energy saving requirements:

  • Annual heating and cooling consumption must be at least 50% lower than a comparable home built according to the 2006 International Energy Conservation Code (IECC)

  • All requirements of the 2006 IECC

  • Heating and cooling efficiencies must meet the minimum requirements set forth by the National Appliance Energy Conservation Act of 1987 and be in effect as of construction completion

  • Building envelope standards must account for a minimum of 20% of the aforementioned 50% decrease in heating and cooling consumption, and building envelope meets the standards set forth by the Federal Manufactured Home Construction & Safety Standards.

You can read the full list of regulations and requirements here: https://www.law.cornell.edu/uscode/text/26/45L.

Ekotrope can check your ratings for 45L Tax Credit compliance and deliver report PDFs for all passing homes. This offer is available for both existing and new Ekotrope clients. If you’re interested, please fill out this form.

*This article was updated on 1/11/21 to update the expiration date of 45L tax credit to 12/31/2021. This extension was made in the Covid-19 Relief Package.