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Homebuilders in Minnesota know that energy efficiency can be a key selling point for new homebuyers. Statewide, at least 547 homes and apartments have earned the Environmental Protection Agency’s (EPA) trusted ENERGY STAR certification, which helps consumers choose homes that are designed and built with energy efficiency in mind.
Two significant ENERGY STAR program updates that may interest Minnesota’s homebuilders includes:
A federal tax credit is now available for homes that earn the ENERGY STAR.
The EPA recently launched a new certification program, ENERGY STAR NextGen, that recognizes homes and apartments equipped with leading-edge, efficient electric technologies and electric vehicle charging capabilities.
As part of the Inflation Reduction Act (IRA), the § 45L New Energy Efficient Home Credit was updated and extended through 2032. For homes and apartments acquired on or after Jan. 1, 2023, earning the § 45L tax credit requires certification to an eligible version of the ENERGY STAR Residential New Construction program.
The § 45L tax credit is available for:
- Single-Family Homes: $2,500 available for homes certified to eligible ENERGY STAR .
- Single-Family New Home (SFNH) program requirements.
- Manufactured Homes: $2,500 available for homes certified to eligible ENERGY STAR Manufactured Home (MH) program requirements.
- Multi-family Homes: $500 available for homes certified to eligible ENERGY STAR.
- Multi-family New Construction (MFNC): A larger tax credit of $2,500, available when existing wage and program requirements are met.
ENERGY STAR NextGen builds on the 30-year legacy of the EPA’s ENERGY STAR program and is designed to encourage the adoption of advanced, efficient electric technologies in new homes. These technologies include an electric heat pump, heat pump water heater, cooking appliance, and residential vehicle charging.
ENERGY STAR NextGen is already gaining traction in Minnesota and across the country. In Minnesota, builders like GreenSmith Builders uses leading-edge green and smart home technologies to build homes to zero-energy, zero-carbon, and zero health impact standards.
GreenSmith’s standard home features rooftop solar panels, battery storage, electric car chargers, induction cooktops, and the latest heat pump and smart home technology. The goal is to help to lower the overall cost of homeownership by building to the following third-party certified rating standards: HERS, ENERGY STAR, EPA Indoor airPLUS and Zero Energy Ready Homes.
“Forty percent of our energy use comes from buildings. That’s a significant contributor to climate change,” said Aaron Smith, CEO of GreenSmith Builders. “Ultimately, we’re trying to transform an industry that has been doing things the same way for more than 100 years. We want to make electric, resilient, decarbonized and net-zero homes the norm.”
All ENERGY STAR NextGen homes and apartments also qualify for the § 45L tax credit. Xcel Energy also offers several programs and rebates for new construction builders committed to energy-efficient buildings.
For more information, visit www.energystar.gov/45LTaxCredits to review the FAQ section, or visit energystar.gov/NextGenHomes.