In the U.S., the effort to achieve net-zero homes is gaining momentum. The government is giving special incentives to promote it. Moreover, at the state level, the administration is setting deadlines to get the maximum tax credits to create a state of urgency and immediate action among people to achieve net-zero goals.
The Department of Energy’s Zero Energy Ready Home Program provides a tax credit of up to $5,000 for homes qualifying as net-zero before July 1, 2026. At the policy level, the federal government has set goals to reduce building emissions by 50% by 2032. It also emphasizes achieving a net-zero building portfolio by 2045.
To make it clear to homeowners, the Department of Energy introduced a federal definition of zero-emissions buildings in June 2024. According to it, states must focus on reducing the operational carbon footprint first. It is pollution created by the functioning of normal day-to-day activities at homes and offices.
Deep energy retrofits are one of the ways to reduce operational carbon footprints. These upgrades make a building energy efficient. They are a whole-building approach rather than just replacing a window or adding insulation. They improve the building envelope (walls, roof, windows), seal air leaks, upgrade HVAC and lighting systems, and add renewables like solar PV.
Deep energy retrofits reduce carbon, save money over time, and improve comfort. They make the buildings cooler in summer, warmer in winter, and improve indoor air quality. The government is providing incentives and rebates for retrofits, making them more affordable. This guide will explore what deep energy retrofits are, their benefits, costs, and how the process works.
What Is a Deep Energy Retrofit?
A deep energy retrofit is an extensive renovation to an existing home with a focus on reducing energy usage. Retrofitting involves upgrading or replacing multiple technologies at time rather than replacing only windows or sealing the air leaks and vents. Moreover, they are different from normal home improvement projects because of their scale, cost, and complexity. Homeowners considering deep energy retrofits should take a long view of house-related expenses and consider the total cost of ownership with such a project.
Homeowners who are thinking about deep retrofits must think in multi-dimensions. Although the initial upfront cost of retrofitting is high, but cost of running the home may decrease over time due to reduced energy bills. Moreover, they must take into account the future cost of maintenance and repair.
Main Components of Deep Energy Retrofitting
The main focus of deep retrofit is on the building’s envelope. The envelope includes walls, roof, windows, insulation, and sealing the air leaks. Upgrading the envelope prevents the warm and cold air from escaping. Moreover, it prevents the heat from entering the home in summer and heat from escaping during winter. This helps make homes energy efficient.
Beyond the envelope, retrofitting projects also include upgrading mechanical systems, too. These mechanical systems include upgrading HVAC, lighting, appliances, and water heaters. These projects also include implementing renewable energy sources, such as solar photovoltaics or wind power, to generate enough power to become self-sufficient.
In terms of goals, deep energy retrofits usually aim at reducing energy use by 40% or more, which is considered a benchmark. Some projects may reach 50% or more, especially when done carefully and comprehensively. These retrofits are key steps toward net-zero buildings, where energy use and emissions are minimized as much as possible.
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Step-by-Step Process of a Deep Energy Retrofit
Let’s explore the detailed steps to retrofit your home:
1. Review Your Energy Use
The first step is to understand how much energy your home uses today. Collect at least 12 months of utility bills and enter the data into a benchmarking tool like EPA Portfolio Manager, EnergyScoreCard, or WegoWise. These tools compare your home to similar ones nationwide. This helps you see if your house is less efficient than others or not. It also gives you a baseline so you can track savings later after the retrofit is done.
2. Secure Funding
Deep retrofits can be costly, so finding the right funding is very important. Search for local, state, and federal incentives. Review your financing options and check whether you qualify for tax credits or not. Tools like the “Financial Decision Tree” can help you make the best financial decision. Securing funds through rebates and incentives is a lengthy process and may take time, but the best incentive program makes your project more manageable.
3. Decide If Your Home Is a Good Candidate
Not every home is an ideal candidate for a deep retrofit. Use your energy benchmarking results to find out whether your home has the potential to save energy or not. Usually, the best homes for deep energy retrofits are the older ones with high utility bills, inefficient heating and cooling systems, and other inefficient appliances. Moreover, if your home equipment is old and needs replacement, then it’s another green signal for a retrofit.
4. Choose the Right Audit Protocol
Audit is important because it gives the real-time data and expert recommendations you need before spending money on a deep energy retrofit. The type of energy audit you choose depends on your goals and your funding. If you only plan to cover energy and water upgrades, ask for an Energy and Water Audit Protocol. If you want broader upgrades linked to refinancing or larger improvements, a Green Capital Needs Assessment Protocol may be better. Make sure your auditor knows your goals and the requirements of your funding program.
5. Hire an Auditor and Get the Audit Done
Hire qualified home energy auditors with credentials like CEM, BPI, or HERS Rater. They will review your past utility data, inspect your home, and may inquire about your energy use. They will then provide a detailed report with recommendations for upgrades.
6. Define the Scope and Hire Contractors
Thoroughly go through the auditor’s report to finalize a retrofit plan. Convert expert recommendations into clear construction documents and get quotes from experienced contractors. While planning, it is very important to include extra costs such as removing old equipment or preparing your home for installation. Choosing the right contractor ensures upgrades are installed properly and that savings actually match the audit’s predictions.
7. Quality Assurance and Verification (QA&V)
Hire a third-party expert to double-check the retrofit work. They will confirm that the upgrades were installed properly and that they match the recommendations.
8. Monitor Your Utility Use
Once upgrades are complete, keep tracking your energy and water use with benchmarking tools. This helps you confirm your savings and shows you if there are other areas to improve over time.
9. Maintain and Learn
Learn how to use and maintain your new systems. Make small behavior changes, like adjusting your thermostat carefully or using ventilation correctly. This helps you save extra on utility bills and make your home more efficient. These small steps can boost savings by an extra 5–10% without new equipment. Long-term savings and comfort depend on good maintenance.
Costs and Funding Options
Let’s learn which are the main factors affecting the cost of a retrofitting project.
Extent of Retrofitting
The cost of the project depends on the details and the depth of retrofitting. A basic retrofit might only seal air leaks and upgrade insulation. A deep retrofit may include insulating the whole home, replacing windows and doors, adding renewable energy like solar, and upgrading HVAC systems. More upgrades mean higher costs, but bigger savings and better comfort over time
Details of your Home
The exact cost depends on home details. A small bungalow with a simple shape will cost less as compared to a large two-story home with complex features. Other factors that affect pricing include the shape of the roof, the thickness of the walls, and the condition of your HVAC system. Moreover, a home that is far from net-zero will need more investment as compared to one that is already efficient.
Approach of the Project
You also need to decide how to retrofit your home. Doing everything in one shot is more efficient. But the upfront cost may be too high for many families. A staged retrofit spreads the expense over time and is easier to manage. But it requires more careful planning.
Although the upfront cost for deep energy retrofits is really high, state and federal level rebates and incentives are available to help homeowners achieve energy efficiency.
Federal Incentives for Deep Energy Retrofits
Let’s discuss the main federal programs that can help lower the cost of deep energy retrofits.
Energy Efficient Home Improvement Credit (25C)
Homeowners can get up to $3,200 each year in tax credits. This covers improvements like insulation, air sealing, windows, doors, heat pumps, and even home energy audits. The credit applies to work done between 2023 and 2025.
Residential Clean Energy Credit
This credit is best if you add renewable energy systems. It covers 30% of the cost for solar panels, wind turbines, geothermal systems, or battery storage. This credit is available until 2032. In 2033, it will drop to 26%, and in 2034, it will drop again to 22%. For most homeowners, this is the biggest incentive they can get.
HOMES Rebates
The HOMES program gives rebates to homeowners who reduce energy use across their whole house. The bigger the savings, the bigger the rebate. Low- and moderate-income households can qualify for the highest rebate levels. This program will run until 2031. It’s a good option for families planning staged retrofits.
State and Local Incentives
Let’s explore local programs that add even more savings on top of federal incentives.
Home Efficiency Rebates Across States
Many states now offer their own HOMES rebate programs. States like Wisconsin, Michigan, Georgia, Indiana, and Washington, D.C. have already started this rebate program. These rebates are for upgrades that make your whole home use less energy. In most cases, you need to save at least 20% to qualify. Low-income families can often get larger incentives. The rules vary from state to state, so checking your local program is important.
Utility and Local Rebates
Many utility companies also provide rebates that cover heat pumps, efficient water heaters, insulation, and smart thermostats. The rebate amounts are different everywhere.
Do you want to understand Deep Energy Retrofits in Detail? Watch this Video to Improve your Knowledge!
FAQs about Deep Energy Retrofits
What incentives are available for homeowners to achieve net-zero homes?
The U.S. government is giving many incentives to promote net-zero homes. These include Energy Efficient Home Improvement Credit, Residential Clean Energy Credit, and HOMES Rebates. These programs make retrofits more affordable
What deadlines has the federal government set for building emissions and net-zero goals?
The federal government wants to reduce building emissions by 50% by 2032. It also plans to achieve a net-zero building portfolio by 2045. These deadlines create urgency. They push homeowners to act quickly.
What does the federal definition of zero-emissions buildings mean?
In June 2024, the Department of Energy introduced a new definition. A zero-emissions building must first reduce operational carbon. Operational carbon is pollution from daily activities like heating, cooling, and running appliances.
How do deep energy retrofits help achieve net-zero goals?
They focus on renovating the building envelope in such a way that the least energy escapes from your home. As a result, less energy is utilized. Moreover, retrofitting involves replacing old equipment with more efficient equipment. They also add renewable energy sources like solar power to homes; consequently, homes make their own energy they need for their daily utilization. All these steps reduce energy utilization, lower emissions, and move the homes closer to net-zero.
What benefits do deep energy retrofits offer homeowners?
Retrofitting lowers the carbon emissions and helps achieve sustainability goals. Over time, they save homeowners a good amount of money in the form of savings from energy bills, rebates and incentives. The retrofitted homes have a moderate and pleasant environment that makes them more comfortable as compared to older, non-energy-efficient homes.
