One Improvement that Reduces Energy Usage and Earns Builders $65M in Tax Credits

Raters have the responsibility of providing insights to help their builders make the best, most cost-effective decisions for their projects. Builders who work with raters know the wide range of benefits that their expertise can provide, as they’ve seen what passing program and tax credit thresholds can do for their bottom line. Many raters are able to grow their business by delivering extra value to builders by finding new and easy ways to maximize the number of homes that earn tax credits.

Showing a builder how to earn a $2,000 tax credit makes it obvious that a HERS Rating is in their best interest. As a result, the 45L Energy Efficient Home Tax Credit is a valuable tool in HERS Rater’s business growth toolbox. As the 45L becomes the status quo, builders will look for strategies to increase their tax credit compliance rate. 

How can raters provide this valuable information to their builder-clients?  

One way is to use one of our new tools - Scenario Modeling - to quickly test and evaluate many strategies on all of your client’s energy models. To demonstrate this analysis, we wanted to test one simple energy efficiency strategy (simple may be in the eyes of the beholder) that most raters inspect or install to see the impact. 

What if all homes rated with Ekotrope in 2021 would have achieved 2.5 or 1.5 ACH50?

The answer is big. $65 million in extra tax credits would have been earned if all homes met a 1.5 ACH50 target. $28 million additional would have been earned at 2.5 ACH50.

At 2.5 ACH50, 61 Rating Companies would see at least $20,000 additional energy tax credits to deliver to their builder-clients. Looking only at the 147 Rating Companies that saw 1 additional 45L Tax Credit, on average, each could have delivered an additional $96,000 in tax credits. 

Achieving 2.5 ACH50 - and especially 1.5 ACH50 - is a big ask for a builder, just like any change to their specification. The more changes and strategies proposed pose a more complex analysis for the rater and a more difficult, and potentially more costly, implementation for builders. This is especially difficult for large-scale builders who have thousands of homes in their portfolio. However, precise knowledge of the exact outcome makes those decisions clearer and such changes more obvious. Just like making the pitch that a builder can earn $2,000, showing them exactly how to earn more is very valuable information.

With Scenario Modeling, testing out specification changes to see what’s necessary to pass critical thresholds no longer means looking at a handful of representative homes and running the worst case scenarios one by one. Now, users can determine how any individual or set of changes will impact the performance of up to 1000 energy models at a time - in just minutes. From 45L to IECC 2021, Scenario Modeling ensures that you’re delivering comprehensive and accurate analyses that improve your builder’s portfolios.

Email us at scenariomodeling@ekotrope.com to speak with one of our engineers about the Scenario Modeling tool. We’d be happy to answer your questions and determine if if is the right tool for your needs.