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How Federal Window Tax Credits Benefit the Industry

The time could not be better for manufacturers to introduce more energy-efficient windows so that homeowners can upgrade their homes and benefit from new federal tax incentives that help offset the costs.

Manufacturers also reap the rewards when listing their window products in the right tool to guide homeowners through the process of finding and selecting an energy-efficient window specific to their geographic region. The Efficient Windows Collaborative, powered by the National Fenestration Rating Council, connects consumers to manufacturers in one site for all-things windows.

The EWC provides unbiased information on the energy efficiency, comfort, and energy savings of windows based on the Energy Star zones. This online resource helps consumers meet their energy- and cost-savings goals. Homeowners in the market to replace their old windows can gain a new level of understanding when searching for windows, backed by NFRC ratings and certification.  

For most new homes, windows make up about eight percent of the building’s envelope but can account for half of the heat loss or gain. This results in higher utility costs because HVAC systems must work harder and longer to keep the occupants comfortable.

Improve a Home's Performance

Energy-efficient tax credits make it appealing for homeowners to upgrade and replace their old, drafty windows. Through the Inflation Reduction Act of 2022, federal tax credits provide savings for homeowners, home builders, and commercial building owners to offset the costs of improvements and upgrades to make a building energy efficient. The Energy Efficient Home Improvement Credit applies to windows, doors and skylights. The building envelope components’ credits include exterior doors with 30 percent of costs up to $250 per door, up to $500, and exterior windows and skylights with 30 percent of costs up to $600.

Another program, the Energy Star Home Upgrade, provides a six-point checklist to improve your home’s energy performance that includes upgrading to high-performing windows. Replacing a home’s current windows with those that are Energy Star-certified can lower household energy bills by up to 12 percent.

Additionally, the EWC lists utility and state programs to help residents, building owners, or builders finance improvements in window energy efficiency as well as other resources on state, local, utility, and federal incentives, rebates, and policies that promote renewable energy and energy efficiency. All of this enables consumers to compare Energy Star-certified products and make informed purchase decisions.

Through a partnership with the Department of Energy and Lawrence Berkeley National Laboratory, the EWC continues to upgrade and refine the website with a consumer window buying guide and resources on indoor comfort. Starting this year, all Energy Star-certified windows are being added into the site’s proprietary Window Selection Tool. To build upon this, the EWC will become more robust to maximize value for consumers and window manufacturers.

Certify to Energy Star

We know that consumers regularly rate Energy Star products as their preferred choice, and they look for that blue label that ensures it has been rated and certified to meet performance standards. There is also a level of trust and consumers have peace of mind when buying an Energy Star product. When manufacturers certify their windows to meet Energy Star criteria, those products become more appealing to homeowners who want the benefit of energy and cost savings as well as valuable tax credits.

As homeowners and builders start to research any qualifying tax credits in the Inflation Reduction Act, it is the perfect time for window, door, and skylight manufacturers to let these consumers know about their company’s energy-efficient products. For more information on credits and rebates, check out the EWC’s financing and incentives page.

In addition to the tax incentives, credits, and rebates for homeowners in the Inflation Reduction Act, manufacturers also can reap rewards. Check out the Advanced Energy Project Investment Tax Credit, or 48C ITC, that provides tax credits for manufacturing facilities that reduce greenhouse gas emissions by at least 20 percent, according to the Department of Energy. This includes measures such as improving efficiency, reducing waste, carbon capture, and adding low- or zero-carbon heat processes. (Full disclosure: I am not a tax preparer or offering tax advice, so read the details of the law to determine whether any facility modifications qualify for the 48C ITC.)


Michelle Blackston NFRC

Michelle Blackston

Michelle Blackston is senior director, development and engagement for the National Fenestration Rating Council.