Section 45L of the Internal Revenue Code provides a tax credit of up to $2,000 per dwelling unit for builders and developers of energy-efficient new construction. To qualify, homes must meet either ENERGY STAR certification requirements or the more stringent DOE Zero Energy Ready Home (ZERH) standard. The Inflation Reduction Act of 2022 increased the ZERH credit to $5,000 per unit for homes certified after 2022.
For a 100-unit affordable housing development, the 45L credit can be worth $200,000 to $500,000 in direct tax benefits. The credit is non-refundable, but it can be carried forward, and for many developers it materially shifts a project from marginal to viable. Critically, the credit is claimed at placed-in-service, which often aligns with stabilization — exactly when capital partners most need the boost.
We guide your project through every step of the 45L process: pre-construction energy modeling to confirm the design will meet the threshold, design support to specify the right combination of measures, on-site verification at the right milestones, final certification documentation, and the energy codes / inspection reports that the IRS requires at tax filing. We coordinate with your tax credit partner and your general contractor to keep the documentation chain clean and audit-ready.
To start a 45L conversation, we need: the project address and unit count, the construction schedule (or projected placed-in-service date), the building plans (or floor area summaries if plans are not yet drawn), and information about which energy efficiency measures you are considering. From there we can model the design, identify the gap to the 45L threshold, and recommend a cost-effective path to qualification.