Tax Policy

Making the Tax Code Work for Energy Efficiency

Tax incentives are among the most powerful tools in the energy efficiency toolkit. Federal credits for home energy upgrades, efficient equipment, and high-performance new construction have helped millions of households and businesses lower their energy bills while reducing emissions. When designed well, these incentives drive long-term market transformation — shifting manufacturers, builders, and consumers toward more efficient choices that persist well beyond the credit itself.

ACEEE works with federal, state, and local officials to advocate for, design, and analyze tax policies that reward efficiency investments and remove barriers. At the federal level, we track and analyze the real-world impact of tax credits, and make the case for maintaining and strengthening them. We also examine how accelerated depreciation, production incentives, and other tax mechanisms can unlock efficiency investments in commercial buildings, multifamily housing, and industry.

The current moment is critical. Efficiency tax credits created or expanded by the Inflation Reduction Act have largely been repealed, despite the evidence showing they were working to lower bills. ACEEE provides the independent analysis that policymakers need to understand what’s at stake and why they should be improved and reinstated.