Energy Efficiency Tax Credits for Green Building

Here at Green Built Alliance, we believe that sustainable and eco-conscious building should be rewarded. That is why we have provided easy access to information on renewable and energy efficiency tax credits and other programs that encourage homeowners, businesses, commercial buildings, contractors, and builders to make the best decisions economically and environmentally. If you would like to view blog posts on this same topic, please click the button below.

Energy Efficiency Tax Credits for Residential Homes

Energy Efficiency Tax Credits for Homeowners

The Inflation Reduction Act of 2022 offers tax credits for many different energy-efficiency upgrades to your home and vehicle. Check out ReWiring America’s IRA Calculator and/or download Green Built Alliance’s Reduce and Reuse Handout with listings of IRA tax credits on the backside.

Federal IRA Tax Credit: Home Owner Managing Energy Savings (HOMES) Rebate Program

$4.3 billion in direct rebates accessible to all existing households (not new construction) for whole-home energy efficiency upgrades. Starting in 2023 through September 30, 2031, or when funding runs out, whichever comes first. It could take time for the Department of Energy to stand up the programs and provide further guidance around income eligibility, etc. Rebates will be available at point-of-sale through state programs funded by the U.S. Department of Energy.

Retroactivity Fact Sheet and
Eligibility Checklists

The retrofit must have started on or after Aug. 16, 2022 and a home assessment must be conducted prior to the retrofit that recorded. 

For low- and moderate-income households:

  • Up to $8,000 (or 80 percent of the project cost): Home retrofits that achieve energy savings of at least 35%.
  • Up to $4,000 (or 50 percent of the project cost): Home retrofits that achieve energy savings of at least 20%.

For all other households:

  • Up to $4,000 (or 50 percent of the project cost): Home retrofits that achieve energy savings of at least 35%.
  • Up to $2,000 (or 50 percent of the project cost): Home retrofits that achieve energy savings of at least 20%.
  • Program uses modeled energy savings, states may choose to use measured savings.

Federal IRA Tax Credit: Energy Efficient Home Improvement Credit

Tax credit equal to 30% of the costs of eligible equipment or materials that improve energy efficiency in existing homes (not new construction). All homeowning taxpayers, and in some cases renters.

Generally, a taxpayer can take up to $1,200 in credits per year, with a few exceptions for taking an additional $2,000 in credits. This credit can be taken annually, so a taxpayer could receive credits for installing a heat pump one year, insulation the next year, windows the next year, etc. There are additional caps on certain types of improvements. They are:

  • Up to $2,000: Heat pump, heat pump water heaters, biomass stoves
  • Up to $1200: Envelope improvements such as insulation and air sealing.
  • Up to $600: Traditional HVAC equipment such as central AC, water heaters, boilers, furnaces, as well as
    upgraded breaker boxes, exterior windows and skylights.
  • Up to $500: Exterior doors ($250 per door).
  • Up to $150: Home energy audits.

Federal IRA Tax Credit: High-Efficiency Electric Home (HEEHRA) Rebate Program

$4.5 billion in direct, point-of-sale rebates to qualifying households based on income (in existing AND new homes – depending on the state) for purchasing qualifying energy-efficient equipment, up to $14,000 total for all eligible purchases. Qualifying households are low- and middle-income families whose income is less than 150% of their area’s median income. Rebates will be available at point-of-sale through state programs funded by the U.S. Department of Energy. Rebates are now projected to be available in limited areas after June of 2024 and available in most areas beginning in 2025 according to the U.S. Department of Energy. The rebates won’t be retroactive, so you’ll need to wait until they’re available.


Median Income Lookup Tool

  • To be eligible for rebates of 100%, households must be below 80% (for Buncombe County $70,080) of their area’s median income.
  • To be eligible for rebates of 50%, households must be between 80% and 150% (for Buncombe County $70,080-$131,400) of their area’s median income.

Eligible appliances and projects:

  • Up to $8,000: Heat pump for space heating or cooling.
  • Up to $4,000: Electric load service center upgrade.
  • Up to $2,500: Electric wiring.
  • Up to $1,750: Heat pump water heater.
  • Up to $1,600: Insulation, air sealing, and ventilation.
  • Up to $840: Electric stove, cooktop, range, or oven. Electric heat pump clothes dryer

Duke Energy Discounts & Rebates

Do you have an ENERGY STAR-labeled home? If so you can receive a discount on electric rates after the first 350 kWh used per month.

Duke Energy’s SmartSaver Program Residential Rebate for efficiency upgrades:

ONLY available for existing homes, not new construction.

  • Insulate and Seal Attic: Get $250
  • Seal Ductwork: Get $100
  • HVAC Install: Get up to $300
  • Heat Pump Water Heater: Get $350
  • Pool Pump: Get $300

Duke Energy’s EnergyWise Home enrollees receive up to $100 annual discount applied to their bill to help reduce consumption during times of high demand. It is the greatest opportunity for our community to avoid the need to build a new power plant and most program participants never notice a difference. It requires a free contractor-installed device on your home’s heat pump or electric water heater.

Smart Thermostat Up to $100 credit
AC Control Device Up to $50 credit
Heat Strip Control Device Up to $50 credit
Water Heater Control Device Up to $50 credit
Bundle: Smart Thermostat + Water Heater Up to $150 credit

Duke Energy’s Home Energy House Call offers eligible homeowners a free home energy assessment, valued at $180. What you’ll get:

  • Free in-home energy assessment
  • Free personalized report with recommendations to save energy and money
  • Free energy savings kit with LED lightbulbs, weatherstripping, showerhead and more

Dominion Energy’s Heating & Cooling Rebates for Homeowners

  • Heat Pump Water Heaters: $350
  • High-Efficiency HVAC; air-to-air heat pumps: $300
  • High-Efficiency HVAC; central air conditioning: $300
  • Whole House Incentives: $1,000 – $4,000 depending on efficiency

Energy Efficiency Tax Credits for Contractors/Builders

DOE New Energy Efficient Homes Credit (IRA Sec. 13304)

Expanded Sec. 45L tax credit for builders and developers for new, energy-efficient housing, including single-family, manufactured, and multifamily from 2023 through 2032. This is a tax credit that qualifying taxpayers receive when filing federal income taxes.

Amounts for developers of single-family and manufactured homes:

  • $5,000: For homes that are certified under the U.S. Department of Energy’s (DOE) Zero Energy Ready
    Home program guidelines.
  • $2,500: For homes that are certified under ENERGY STAR guidelines.

What the IRA Means for Contractors and Electrification

Incentivizes contractors to perform electrification projects in LMI communities with contractor rebates up to $500 per qualified project.

Duke Energy’s Residential New Construction Program

The RNC Program provides incentives to builders up to $9,000 per home in Duke Energy Progress (DEP) territory, and up to $6,000 in Duke Energy Carolinas (DEC) territory. Incentives help builders install high-quality upgrades that impact energy efficiency to comply with the HERO code. Some local builders have received $5000-7500/house in rebates. The savings are based on the HERS rating.

The key to maximizing your rebates is working closely with your HERS Rater ($1200-$1800). Your Rater will evaluate your current plans and specifications, develop upgrade options, project your rebates, and process rebate applications on your behalf.

View the list of Participating Raters.

Energy Efficiency Tax Credits for BOTH Homeowners and Builders

Federal Internal Revenue Code Section Amended: 45L Tax Credits for NEW or Substantially reconstructed Homes

Amended by the Inflation Reduction Act of 2022 (IRA) to provide taxpayers with a tax credit for eligible new or substantially reconstructed homes that meet applicable ENERGY STAR home program or DOE Zero Energy Ready Home (ZERH) program requirements. More information is available on the ENERGY STAR® website:
Tax Credits for Homeowners – up to $3,200 annually to lower the cost of energy efficient home upgrades by up to 30 percent available through 2032. 
Tax Credits for Home Builders – $2500-5000 for single-family, manufactured, and multifamily homes has been extended through 2032.

Federal IRA Tax Credit: Alternative Fuel Refueling Vehicle Property Credit (e.g., EV ad ZEV charging)

If you install qualified vehicle refueling and recharging property in your home or business, you may qualify for the alternative fuel refueling property tax credit. The credit was extended and modified by the Inflation Reduction Act. The credit allowed is based on the placed-in-service date for the qualifying property.

Starting in 2023 through 2032, the credit will also apply to “bidirectional” charging equipment and qualifying property will be limited to property placed in service within low-income communities or non-urban census tracts.

  • Businesses meeting prevailing wage and apprenticeship requirements may be eligible for a 30% credit with the same $100,000 limit.
  • For qualifying property not subject to depreciation, the credit equals 30% of the cost with a maximum amount of $1,000 per item.

City Tax Credits

DSIRE lists energy-efficiency rebates for various cities in NC or through various NC energy companies.

The City of Asheville’s Sustainability Office offers residential building permit fee rebates for single-family homes to support a clean and healthy environment on properties meeting the following criteria below. More information on the sustainability fee rebates can be found under “Supplemental Forms” on the city’s residential permit application page.

  • $500 for Green Built Homes certification
  • $250 for a verified Home Energy Rating System (HERS) score of 49 or below
  • $100 for ENERGY STAR® certification
  • $175 for solar photovoltaic systems
  • $100 for tree protection (saving a tree)
  • $100 for energy-savings tree planting (planting a new tree)

The Town of Black Mountain offers $500 permit fee rebate for buildings certified under the Green Built Homes or LEED programs.

Energy Efficiency Tax Credits for Commercial Buildings or Businesses

The Inflation Reduction Act extended and expanded the energy efficient commercial buildings deduction (Section 179D of the Internal Revenue Code). A tax deduction of up to $1.80 per square foot is available to owners or designers of commercial buildings or systems that demonstrate a 50% reduction in energy usage accomplished solely through improvements to the heating, cooling, ventilation, hot water, and interior lighting systems. Partial deductions of up to $.60 per square foot can be taken for qualifying measures.

Duke Energy’s EnergyWise Business

An energy management program that helps Duke Energy manage the energy use of the power grid. For participating your business will receive financial incentives and a free programmable thermostat.

Duke Energy’s Small Business Energy Saver

Pays up to 80% of select energy efficiency improvements for your business. You must first get an assessment from an approved contractor, then choose from a list of customized recommendations in lighting, refrigeration, and HVAC, and afterwards Duke Energy will pay up to 80% of select improvements for eligible businesses upfront. 

Duke Energy’s Smart Saver for Business

Provides many incentives for installing energy-efficient equipment for your business in the following categories below:

  • Lighting
  • HVAC
  • Commercial Equipment
  • Industrial Equipment
  • Custom Incentives
  • Agricultural

Duke Energy’s Demand Response Automation

Provides financial incentives (up to 14% off your bill) for using less energy during peak energy demand periods.  This program also provides technical support to assist you in making a plan of action to use during peak demand.

Renewable Energy Tax Credits

For detailed information on all of the below financial incentives and more, visit DSIRE.

Federal IRA Tax Credit: Residential Clean Energy Credit

Tax credit of 30% of the cost of residential solar, wind, geothermal, and biomass fuel projects started between 2022 and 2032. (Starting in 2023, storage batteries will also be eligible if their capacity is at least 3 kilowatt-hours.)

Phasedown begins in 2033 through 2034. For eligible projects starting in 2033, the credit is 26%, and
in 2034 it’s 22%.

This is a tax credit, which qualifying taxpayers receive when filing federal income taxes.

NC City/County low-interest Loans

North Carolina allows cities and counties to offer low-interest loans for solar panels and other energy upgrades. Thanks to this recent legislation, solar loan terms in North Carolina can be no longer than 20 years, have an interest rate cap set at 8 percent, and are easily renewable.

Duke Energy NC Net Metering (no more Rebates)

Duke Energy is no longer offering solar rebates to North Carolina customers (they expired early 2023). However there are still net metering policies for both residential & commercial. Click the link below to learn more about the residential net metering current and future from our solar partner Sugar Hollow Solar:

NC Green Power per watt rate

A per kWh rate paid for electricity generated from a renewable resource that is fed onto the grid.

DSIRE City Rebate Programs

More rebates are offered through various cities for solar, wind, geothermal, biomass, storage, hydroelectric, etc. (click on the top links).

Other Energy Efficiency Financial Resources

Database of State Incentives for Renewables & Efficiency

Information on state, local, utility, and federal tax incentives that promote renewable energy and energy efficiency

Green Mortgage Guide

Guide to Energy Efficient and green mortgages.

Tax Incentives Assistance Project

Sponsored by a coalition of public interest non-profit groups and government agencies, it’s designed to give the latest information on federal income tax incentives for energy efficiency with buildings and vehicles.