ResourcesInvestment Tax Credit (ITC)

The Inflation Reduction Act (IRA), which includes an Investment Tax Credit (ITC) for electrochromic glass, was passed in August 2022. Halio, with assistance from an independent law firm Foley & Lardner LLP, and input from other industry experts, has conducted an analysis
with respect to how ITC can apply to the electrochromic (smart) glass market.

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Stay in the know regarding the benefits of ITC for Electrochromic (smart) glass.

Legal Analysis

Memorandum by Foley & Lardner and joint letter/comments to the IRS.

What is the Electrochromic Glass Investment Tax Credit (ITC)?

  • The ITC is a tax credit for the installation of electrochromic glass systems using electricity to change light transmittance properties, i.e., to tint.
  • An ITC may be claimed on installations that have completed construction and have been placed into service after December 31, 2022 and new construction that commences before January 1, 2025.
  • The ITC is a one-time transferrable, dollar-for-dollar reduction in tax liability for a taxpayer that owns/installs Halio Smart Glass, or for example, installs smart glass Powered by Halio™, using VIRACON PLUS™ SMART GLASS.

What are the Credit Rates?

  • Certain criteria must be met to take advantage of the ITC rates.
  • Smart glass Powered by Halio is eligible for a 40% tax credit in most instances, based on interpretations by the IRS for IGU, solar, and curtain wall credits.

How Does a 40% ITC Compare to Low-e?

Typically, Electrochromic smart glass will be as affordable as Low-e glass, and often even more affordable. The example below illustrates a 40% ITC, saving upfront costs, while delivering direct benefits of a smart glass building once occupied, including up to 22% energy savings, lower OpEx/maintenance, unobstructed views, and beautiful building aesthetics.

Electrochromic Smart Glass

Window System:

$15.6M

IRA Benefit:

$6.2M

Net Electrochromic Smart Glass Cost:

$9.4M

Low-e Glass

Window System:

$12.0M

IRA Benefit:

$0M

Net Low-e Glass Cost:

$12.0M

Benefits from Installing Electrochromic (EC) Glass?

  • ITC reduces upfront cost of having an environmentally friendly, self-tinting facade
  • EC indirectly lowers construction costs by eliminating usage of blinds/building shades, pockets, and by downsizing usage of HVAC equipment
  • EC helps meet regulations and qualifies for incentives for sustainability and energy codes
  • EC increases the facility lease value and usable floorplate
  • EC enables a better living/working environment

What is the Cost Basis for ITC?

  • It is the credit rate multiplied by the full Halio system purchase price, including installation costs
  • Only tax-exempt entities that place properties into service in 2023 or later may claim cash payments in lieu of investment tax credits
  • Non-tax-exempt taxpayers may sell the ITCs to other taxpayers for tax-exempt cash payment

The Time is Now!

Learn more about the benefits and impact of ITC by using Halio Smart Glass. Talk with an expert about your next building project and how ITC can work for you.