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Upgrading and sealing your home's shell is a surefire way to secure year-round comfort and maximum energy efficiency. Your windows alone could be responsible for up to 30% of your home's heating and cooling energy usage. Heat loss (or gain, depending on the season) is the culprit, and upgrading your doors, windows, and skylights with better materials and sealant can make a world of difference.
Not only will you and your family be more comfortable with fewer temperature fluctuations, but you'll likely see some of that investment back each month on your energy bill, too. Replacing your windows, doors, and skylights with ENERGY STAR® alternatives, for example, could save you an average of 12% on energy costs.
In addition to that, the government has created a series of rebate programs and tax credits to help you save on your home-shell upgrade, and we'll walk you through everything you need to know in order to secure them right here.
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The true costs of a home-shell upgrade are difficult to predict. Variables like how many items you choose to replace and your budget for each will vastly impact what you spend. For instance, when shopping for new windows or an upgraded door or skylight, you'll want to keep the following in mind:
A low U-factor: This measures how well the product insulates. A lower U-factor means better insulation.
The right Solar Heat Gain Coefficient (SGHC) for your climate: SGHC measures how much of the sun’s heat passes through the product. Lower SHGC values will be cooler, higher will be warmer.
The National Fenestration Rating Council (NFRC) label for industry-standard ratings on how your new product stacks up when it comes to visible light transmittance, air leakage, and condensation resistance.
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You'll also want to consider materials like coatings or the amount of panes for your windows or steel or fiberglass for your doors, which can all affect the energy-efficiency of your new installations. Even more, how you choose to insulate them can also impact your savings and the overall comfort of your home. Needless to say, it's a lot to keep track of, but that's what the experienced contractors in the Pearl Network are for. They've done it all and can help you make the right product choices for your goals, location, and budget.
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The 2022 Inflation Reduction Act (IRA) has allocated $8.8 billion in rebates to incentivize homeowners to undertake energy-efficient home upgrades, along with key tax credits that can help you save on purchases and installations related to a home-shell upgrade.
Through HEEHRA, $4.5 billion-dollars has been allocated to states to provide rebates to low- and moderate-income homeowners for purchases related to energy-efficient home upgrades. HEEHRA is a point-of-sale rebate, so when you purchase a product or service related to upgrading your home's windows, doors, or skylights, you should see savings automatically.
Most notably, HEEHRA also covers "enabling measures,” which means you can also get money back on work related to your new windows and doors like air sealing and insulation.
Depending on your household income, the savings through HEEHRA can be substantial:
Low-income homeowners: 100% rebate (up to $14,000) for households making less than 80% of their area median income (ARI)
Moderate-income homeowners: 50% rebate (up to $14,000) for households making between 80-150% of their ARI
HOMES is another rebate program that could help you when it comes time to upgrade your windows, doors, or skylights, though it will work a bit differently. HOMES offers rebates based on your home's energy efficiency and divides them into two groups: modeled-performance and measured-performance rebates.
This HOMES rebate is based on how much new additions, such as doors, windows, or insulation, are projected to impact the energy efficiency of your home.
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In order to arrive at that number, a BPI-2400-compliant energy modeling software will be required to establish a baseline value for your home's energy usage and propose a new model based on its historic usage.
Here's how savings breakdown for HOMES:
Low- or moderate-income households that achieve energy system savings of at least 35% will be eligible for the lesser of $8,000 or 80% of the project cost. Households that achieve less than 35%, but more than 20%, will be eligible for the lesser of $4,000 or 80% of the project cost.
High-income households that achieve energy system savings of at least 35% are eligible for the lesser of $4,000 or 80% of the project cost. Households that achieve energy system savings of less than 35% but more than 20% are eligible for the lesser of $2,000 or 80% of the project cost.
Projections are nice, but you're in the home-upgrade business to see real bottom-line value — and that's where this next rebate comes in. Measured-performance rebates under HOMES cover your home's actual efficiency improvements. An approved open-source measurement and verification (M&V) software will be used to confirm your home's energy performance, and rebates will then be dispersed based on the following guidelines:
For low- and moderate-income homes: Retrofits that achieve energy system savings of at least 15% are eligible for a payment rate per kilowatt hour saved, or kilowatt hour-equivalent saved, equal to $4,000 for a 20% reduction of energy use for the average home in your state or 80% of the project cost.
For high-income homes: Retrofits that achieve energy system savings of at least 15% are eligible for a payment rate per kilowatt hour saved, or kilowatt hour-equivalent saved, equal to $2,000 a for a 20% reduction of energy use for the average home in your state — or 50% of the project cost.
Note that the bill doesn't specify that homeowners pursuing measured-performance rebates are automatically given the lesser of the amounts above, but it may be wise to assume so for your planning.
These rebates are expected to be available later in 2023 and will be available until September 30, 2031. Unfortunately, energy savings of less than 15% (for measured-performance rebates) and 20% (for modeled-performance rebates) aren't eligible. If that's you, don't worry — there are still plenty of other ways to save, as we'll get to next.
In addition to rebates, the IRA has created or extended a series of tax credits to help homeowners. If you're upgrading your home's shell, Code § 25C, or the Energy Efficient Home Improvement tax credit, should be your priority. That's because, while the credit calls to name various energy-efficient appliances, it also covers "building envelope" components — in other words, walls, windows, and doors.
Here's what you could save come tax time depending on what you upgrade (with the maximum amount you can save per year being $1,200):
Exterior doors (30% of costs up to $250 per door, up to a total of $500)
Exterior windows and skylights (30% of costs up to $600)
Insulation materials or systems and air sealing materials or systems (30% of costs)
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To claim these credits, file IRS Form 5695 on your tax return. Calculate the credits on Part I and enter your total on your 1040. If the number is greater than the amount of income tax you have due, the difference will be carried over to the following year. If you forget to file credits in time, the government allows it to be retroactively claimed. Just file an amended return after the fact to get your savings.
Fortifying your home's shell is a smart place to start, and when you're ready to take the next steps in your home upgrade, there will be even more tax credits available that could help you save. Whether you're switching to electric appliances, installing solar panels or adding an EV charging station, there's a tax credit for you. Be sure to check out our deep-dive into tax credits and rebates to see how you can save on your home upgrade from end to end.
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There's even more ways to save, too. In fact, many state and municipal governments and even manufacturers like ENERGY STAR offer credits and incentives of their own.
It's a lot to stay on top of in order to maximize your savings, so make sure you never miss out with Green Door's Rebates Finder. Creating an account on the app is free, and once you're set up, you'll be able to browse local rebates and tax credits along with eligibility information, and links claim them, right on the app. Green Door is updated regularly, so you'll always be working with the most up-to-date information.
When you're ready to move forward, the vetted contractors in the Pearl Network will be ready to help you make the right product, material, and sealing selections for your home. When it comes to securing your Pearl Certification, the way work gets done is just as important as the products you choose, so working with the right contractor for installation can be key to finalizing your new high-powered home.
Ready to get started? Log in to Green Door to start exploring window, door, and skylight options for your home today.
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