Spray foam has many cost benefits including lowering energy bills through improved efficiency and reduced air loss. It is a great way to invest in your home or building and could save you money specifically by installing smaller HVAC systems, using fewer framing and roofing materials and employing one product that could provide three functions: insulator, air barrier and moisture barrier, which could lower construction costs.
Potential Cost Efficiencies
SPF could save you money in the following ways:
- EPA Energy Star estimates that up to 40% of energy is lost to due to air leakage through cracks and gaps. SPF provides improved efficiency and reduced air loss that could lower energy bills.
- Spray foam offers home and building owners opportunities to lower maintenance costs on roofing systems.
- Homeowners, builders and architects may be able to qualify for tax incentives, rebates, grants or certifications.
- By improving the resiliency of your home and mitigating repairs post climate related disasters.
Tax Credits, Rebates and Incentives for Spray Foam
Purchasing a new home with spray foam or retrofitting your existing home may qualify you for tax credits, rebates, and other incentives. To find available local and state incentives, visit the Database of State Incentives for Renewables & Efficiency (DSIRE) at http://www.dsireusa.org/.
The 25C tax credit was recently extended for 10 years, through 2032. The 25C provides a credit to homeowners for installing certain energy-efficient insulation, windows, doors, roofing, and similar energy-savings improvements.
Spray foam is an all-in-one insulation that provides thermal performance along with a moisture and air barrier. Because of spray foam’s air barrier, homes retrofitted with spray foam can save more energy than other forms of insulation installed without additional air sealing.
25C Tax Credit
For: Current homeowners looking to upgrade their insulation and air sealing systems
Expiration: December 31, 2032
Amount and Qualifications: The 25C tax credit provides a credit to homeowners for installing certain energy-efficient insulation, windows, doors, roofing, and similar energy-savings improvements. It was recently extended through 2032.
Beginning on January 1, 2023, the expanded 25C provides a 30% tax credit (up to $1,200 annually) to consumers who take certain steps to make their homes more energy efficient.
The expanded 25C also provides that air sealing materials can qualify for the credit. This is important because air sealing and insulation work together to maximize energy savings, which is why the EPA Home Performance with Energy Star program recommends that, for example, the attic floor be air sealed before installing more insulation.
How to apply: Homeowners can apply for the 25C tax credit by filling out IRS Form 5695, Residential Energy Credits, while doing their federal tax return. For information about Form 5695 or to find the actual form, click here.
45 L
For: Homebuilders
Expiration: December 31, 2032
Amount and Qualifications: The 45L tax credit is an incentive provided for new residential building construction.
Beginning January 1, 2023 through December 31, 2032, a tax credit of $2,500 is provided to buildings that meet the new EnergyStar programs. An increased credit of $5,000 is provided for each home meeting the requirements of the Department of Energy’s Zero Energy Ready Home program.
How to apply: Homebuilders can apply for the 45L tax credit by filling out IRS Form 8908, Energy Efficient Home Credit, while doing their federal tax return. For information about Form 8908 or to find the actual form, click here: Note: This information is subject to change as the IRS issues new guidance.