The Inflation Reduction Act (IRA) is a legislative package passed in August 2022 by Congress and signed into law by the President. The Act aims to fight economic inflation, lower the deficit, reduce the prices of prescription drugs for seniors, and lower the country’s carbon emissions.
How does this impact homeowners, you may ask?
Below we’ve highlighted the Act’s effects and the rebates and tax breaks that homeowners may take advantage of.
Why is the IRA important to homeowners?
This new anti-inflation Act provides a benefit of up to $14,000 for homeowners who make improvements to their houses. 2022’s IRA Act aims to cut the cost of home energy use through upgrades of energy-efficient appliances and weatherizing. If all goes as planned with the Inflation Reduction Act, we can expect to reduce carbon emissions by 40% by 2030.
Here are a few ways to improve energy and cost savings in your home.
Weathering the home to stop leaks is the biggest payoff for saving money and reducing emissions. A significant contributor to high energy bills is gaps along baseboards, windows, doors, pipes, fireplaces, and electrical outlets. These areas can cause heat to leak out of your home in the winter and air conditioning to escape during the summer. Poor insulation typically leads to cranking up the heat or AC to keep the temperature more comfortable.
To see where your home may leak, do a self-inspection of common areas like windows and doors. If a leak is found, apply caulk or weatherstripping to help reduce places for air to escape.
Key Takeaway: The IRA provides 30% tax credits with a maximum of $1,200 yearly for weatherization work.
Here are clues that it may be time to replace your windows:
Your home feels too cold in the winter try upgrading to a double panel.
Frames are rotting, sagging, warped, or leaking around the window.
It’s challenging to open or closIf the windows are single pane – it’s time to upgrade to double panel windows.
Key Takeaway: The Inflation Reduction Act offers $600 for window replacement and $250 for exterior door replacement.
Electrifying a house means swapping out fossil fuel-burning appliances for ones that run on electricity.
Two benefits of making homes more energy efficient and running on electricity: help combat climate change and can save money in the long run.
Heating and cooling are typically the prominent energy suckers- here’s how to reduce those costs:
Upgrade air conditioners and clothes dryers to electric options.
Install new HVAC systems (although this does come with the highest upfront costs, it’ll save money in the long run).
Use electric heat pumps to heat and cool the home.
Upgrade the breaker box to prepare for an all-electric home.
Invest in an energy-efficient heat pump water heater.
Change to an electric stove, cooktop range, or oven.
Key Takeaway: All of the above changes are eligible for tax breaks.
There is a 30% tax credit for up to $2,000 to purchase and install a heat pump and rebates up to $8,000 for low to moderate-income households earning less than 150% of the local median income. A new breaker box can get you up to $4,000, and new kitchen appliances qualify for up to $840.
Other Ways to Save Money
If purchasing new items is not in the cards for you at this time, there are other things you can do to cut energy costs.
Here are other ways to cut energy costs:
Turning out lights when not using them, especially when not home.
Replace old light bulbs with LED lights (this does cost more upfront but saves money over time).
Unplug appliances and electronics that are not being used. “Energy vampires guilty of using a lot of power even when not in use are TVs, cable boxes, computers, and smart appliances.
Lower the water heater temperature, even by a couple of degrees.
Line dry clothing when it’s a nice warm day out.
Adjust your thermostat a degree or two during sleeping hours.
Change the air filters in the furnace, HVAC system, and dryer vents.
Close the blinds, especially when not home. This keeps the air from escaping through the windows.
Inflation Reduction Act for Solar
Motivation to go solar has never been higher, as the IRA has a 30% tax credit for installing solar roof panels. A solar system can run $20,000 on average, which is a significant expense up front, but it will save quite a bit in the long run.
How does this impact new homes?
NAHB (National Associate of House Builders) opposed the bill stating that it would impact the taxation of real estate and new building and energy code requirements. They are concerned the bill will “disincentivize multifamily construction, increase the cost of new homes through higher energy code requirements, and inflate labor costs.”
New housing costs are already relatively high, so the NAHB is concerned about future expenses if the states implement the new codes.
How can I get Help?
Turn Key Fabrication uses the highest quality materials to build our homes. With a focus on energy-efficient products and SIP panels, our tiny houses are already meeting many of the codes and guidelines this new Act is implementing. Contact us to get started on building your carbon footprint-friendly home today.
Structural Insulated Panels are an advanced method of construction offering an energy-efficient, lightweight, self-supporting solution over traditional structures.
As the Tiny and Modular home movement keeps growing, many people choose to buy prefabricated homes, rentals, and investment properties made with SIP panels. These highly customizable panels can be used in floors, walls, roofs, foundations, and basements. SIP panels can dramatically lower the costs of construction, utilities, and maintenance.
What is SIP paneling, and how does it reduce costs over time? We will answer those questions and everything else you need to know about SIP panels.
The Simple Definition of SIP Paneling
SIP stands for Structural Insulated Panel. The pre-manufactured panels comprise an insulated foam core sandwiched between two structural facings, usually an oriented strand board (OSB). The result is a building material that is extremely strong, energy-efficient, and cost-effective.
The combination of structural support and insulation in one panel makes this material so attractive to alternative home builders.
SIP paneling is best suited for residential homes, guest rooms, Airbnb’s, and other vacation rentals. This type of building is trendy among the Modular and Tiny Home communities.
What are the Advantages of using SIP Panels?
Here are just a few reasons why SIP paneling is a popular choice:
Lower utility bills. SIP panels are known for their airtightness and superior insulation, with some estimates claiming 50% more energy efficiency than traditional wood framing.
Cost Effective Electrical Installation. The pre-installed wire chases in SIP panels eliminates the need to drill studs for electrical wiring.
Self-Sufficiency. Most construction using SIP paneling will require no additional support or framing.
Durability. SIP built basements and foundations aren’t prone to the same cracking and shifting as traditional concrete foundations. Not having to cure concrete also means faster construction.
Indoor Air Quality. The airtightness of a SIP structure allows for precise control over indoor air.
VOC Free. SIP panels produce no VOCs or other harmful chemicals that can affect occupant health.
Pests. As SIP panels are primarily made from insulated foam, they aren’t prone to pest infestations such as termites.
What are the Disadvantages of using SIP Panels?
Factors include the number of panels used, individual panel density, labor, installation, and delivery. These are some possible disadvantages of SIP panels:
Ensuring Proper Ventilation. The airtight advantage of SIPs can eliminate drafts and reduce utility bills. This also means you’ll need to have adequate ventilation to avoid condensation build up. Turn Key Fabrication solves this problem in different ways, depending upon if the structure will be going to a hot or cold climate. Common solutions include use of cross ventilation, de-humidifiers, and heat transfer.
Moisture. SIPs built structures are prone to moisture damage. However, this is easily defeated by using a waterproof coating and ensuring proper ventilation.
Finding an Experienced Builder. SIP panels aren’t as commonly used as traditional wood, therefore selecting the best builder can take more effort. To eliminate this issue, we at Turn Key Fabrication, we build everything in-house, so that we can deliver completely assembled, ready to use, prefab houses and rooms.
How much do SIP Panels Cost?
This question has no easy answer because each project is so unique. In 2022, the average cost per panel is between $9-11 per square foot.
How long do SIP Panels Last?
As with all structures, SIP-constructed homes are only as good as the conditions they are subjected to and the care they receive. SIP panels that are properly attached and maintained can easily last 50-60 years or more. This means that they hold up compared to conventional framing.
Repairing injured panels on time is a crucial part of regular maintenance. Structural damage to SIP panels must be accessed, and a solution to the problem must be found to avoid mold, mildew, and degradation of the structure. That can be done by either modifying the site of the panels or total replacement of the panels, depending on the damage.
Turn Key Fabrication uses only the best materials and construction methods available and is proud to offer a limited lifetime warranty on our Tiny Homes and prefab rooms.
Do SIP Panels need Framing?
The unique design of the panel produces a solid building material that needs no additional frame or skeleton for support. This means that SIP panels are structurally self-sufficient.
Are SIP Panels Water Resistant?
While the panels themselves are not waterproof, most builders will cover their SIP with a finishing material. Turn Key Fabrication uses high-quality materials such as laminated wood panels and cabinet-grade plywood, so you never have to worry about adding the right finishing material.
Are SIP Panels Fire Resistant?
Like most materials, SIPs are a manageable fire risk when their construction meets the fire precautions listed in the building code.
We make all of our prefabricated homes with their intended climate in mind. When building structures that live in high fire risk areas, we adjust our building process to prepare for that, such as using SIPs made with a solid core of expanded polystyrene (EPS). Among other advantages, EPS will not maintain a flame on its own, making the fire easier to control.
Are SIP Panels Sound Resistant?
The excellent resistance of a SIP wall depends on several factors such as the density of the panels, construction techniques used, the type and thickness of the exterior finishes applied, and the size of the insulating foam core interior.
SIPs are especially effective at blocking high-frequency noise (high pitched whistles, glass breaking, screaming, etc.)
Are SIP Panels Load-Bearing?
SIP paneled walls can bear impressive vertical and horizontal loads. The load-bearing area of a SIP panel is roughly equivalent to building with 2 x 10 framing.
Looking to the Future of SIP Paneling
We trust that this article has helped answer the most common questions regarding understanding SIP panels. Check out our FAQ for answers to the questions we often ask. Please reach out to us at Turn Key Fabrication for more specific inquiries.
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