Going Green for Tax Reasons by MichaelChoate

VIEWS: 121 PAGES: 93

									 Going Green for Tax Reasons
 The Economic Stimulus Package will create new work for traditional
 building professionals. This economic recovery bill represents the largest
 federal investment in restoration, renovation and sustainable traditional
  American Recovery and Reinvestment Act of 2009 (ARRA), and more………
Tax Credits & Rebates
“The American Recovery and Reinvestment Act of 2009 reinstated an expired IRS
tax credit for improving energy efficiency in existing homes. The tax credits cover
30% of the purchase price of new high-efficiency water heaters, windows, and
air conditioners, and for adding insulation, up to a $1,500 total per household.
To qualify, an item must be 15% to 20% more efficient than the standard model.
In addition, the package includes funds that states can use to sponsor utility
rebates for the purchase of energy-efficient appliances (also 15% to 20% more
efficient than standard) and for tax credits for installing solar panels and solar
hot water heaters.” Sharon O’Malley, EcoHome magazine, March- April 2009

                  NeoCon 2009
       Jamie Gibbs, ASID, IFDA, IFDA, WCAA
              In general,
     what does the package include?
* Funding for school districts to modernize, renovate and
  repair schools. (There are 24,000 schools built before 1950)
* Green affordable housing. Tax incentives for Americans to
  make their homes more energy efficient.
* Mandates the federal government to make its buildings
  more energy efficient which will save taxpayers millions of
  dollars in energy costs.
* Assistance to states and local governments to make energy
  efficient upgrades to buildings and communities.
* Financial support for mass transit systems including the
  construction and renovation of inter-modal transit facilities
  to relieve the traffic congestion.
On February 17th, President Obama signed the $789 billion economic
stimulus bill that includes tax credit incentives for homeowners who make
energy-efficient home improvements. The bill extends eligibility for tax
credits through 2010 on energy-efficient improvements—including
qualifying windows and doors!

The bill includes the ability for homeowners to receive a tax credit of 30
percent of the cost of qualifying energy-efficient products up to a
maximum of $1,500 per household for all improvements made in 2009 and
Discussion about what the ARRA priorities is particularly encouraging. The
American Institute of Architect's position paper on the subject is titled
“Renew and Rebuild: Green Communities: Green Economy.” Likewise, the
National Association of Homebuilders' staff summary on ARRA highlights
tax incentives for "Energy Efficiency Housing Retrofits" ($250 million) and
"Neighborhood Stabilization" ($2 billion). This is a paradigm shift for
industry associations whose new development ethic has, arguably,
contributed to over-building and waste for 50 years.
The requirements to qualify for the new energy tax credit include: Windows
purchased must be equal to or below a U-Factor of 0.30 and a Solar Heat Gain
Coefficient (SHGC) of 0.30.
The purchase of the qualified windows must be made during the taxable year
for which the credit is being claimed.
The credit is only allowed on the price of the qualified windows themselves,
not on installation costs, onsite preparation, assembly or sales tax.
The tax credit is allowable only for qualified window units placed in service in
2009 and 2010.
Homeowners must to save their receipts for their windows purchased along
with all window labels and stickers for verification and tax recordkeeping.
The windows must be installed in the taxpayer's principal residence.

Other Stimulus credits include an initial purchase such as:
•        $15,000.00 stimulus Package money for the deposit on foreclosure
         •$8,000.00 Federal income tax deductions for purchases and
Why should we and who benefits:
• Property owners can now claim some major
  tax deductions on state, local and federal tax
  returns for the next two years.
• Contractors, builders, and property managers
  also qualify for tax benefits.
• Everyone will benefit by sound new
  construction and remodeling product
  specification and building practices.
• It’s a law, so way not use it!
    Energy Efficiency Tax Credits
• The Existing Home Retrofit Tax Credit (Tax Code Section
  25C): Tax credits are available at 30% of the cost, up to a
  $1,500 lifetime limit, for installation in 2009 & 2010 (for
  existing homes only) of these products:
   –   Windows and Doors: 30% of cost, up to $1,500
   –   Insulation: 30% of cost, up to $1,5002
   –   Roofs [Metal and Asphalt]: 30% of cost, up to $1,5002
   –   HVAC: 30% of cost, up to $1,5002
   –   Water Heaters [non-solar]: 30% of cost, up to $1,5002
   –   Biomass stoves: 30% of cost, up to $1,5002
   –   Installation costs may be included as part of the tax credit calculation
       for certain HVAC, Water Heater, and Biomass Stove installations.
 Commercial and Income Properties
You may be eligible for a tax deduction of up to $1.80 per square foot for
improving the energy efficiency of your existing commercial buildings or
designing high efficiency into new buildings. The Energy Policy Act of 2005
includes a tax deduction for investments in “energy efficient commercial
building property” designed to significantly reduce the heating, cooling, water
heating, and interior lighting energy cost of new or existing commercial
buildings. To be eligible, the energy-efficient commercial building property—
such as a state-of-the-art lighting system—must be placed in service between
January 1, 2006 and December 31, 2013. To qualify for the full deduction
($1.80 per sq. ft.) a building owner must make investments designed to reduce
energy costs by at least 50%. A partial deduction, and more likely to qualify, of
up to $0.60 per square foot is available for investments in one of three
systems: lighting, heating and cooling or building envelope-designed to reduce
energy costs by 16 and 2/3% (one third of the 50% requirement).
Tax deductions reduce your overall taxable income with the value of the
deduction dependent on your tax bracket. Tax credits, such as the ones
provided for consumers in the 2005 Energy Policy Act, reduce the amount of
tax you owe dollar for dollar.
             Who are the Players?
•   American Institute of Architects (AIA)
•   American Institute of Building Design (AIBD)
•   Consortium for Advanced Residential Buildings (CARB)
•   U.S. Department of Energy (DOE)
•   Energy and Environmental Building Association™(EEBA)
•   U.S. Department of Energy Office of Energy Efficiency
    and Renewable Energy (EERE)
•   U.S. Environmental Protection Agency (EPA)
•   Energy Value Housing Award (EVHA)
•   Habitat for Humanity
•   Integrated Building and Construction Solutions (IBACOS)
•   Leadership in Energy and Environmental Design /
•   U.S. Green Building Council (LEED/USGBC)
•   Manufactured Housing Institute (MHI)
•   National Association of Home Builders (NAHB)
•   Partnership for Advancing Technology in Housing (PATH)
•   SmartWay™ Transport Partnership
 The Wind, Solar, Geothermal and
  Fuel Cell Tax Credit (Tax Code
          Section 25D):
• Tax credits are available at 30% of the cost, with no
  cap through 2016 (for existing homes and new
  construction) for:
• Geothermal heat pumps
• Solar Panels
• Solar water heaters
• Small wind energy systems
• Fuel cells
The energy-efficiency home products must be “placed in
  service” between Jan. 1, 2009 and Dec. 31, 2010.
 In what areas will people be able to
       claim a tax deduction:
• Specific, qualifying materials
• Green construction practices
• Green removal and waste management
• Water and energy saving products and
• The donation of unused materials and
  recyclable existing materials from a remodel.
       Where do we get the best, latest
•   Energy Star: www.energystar.gov
•   EPA: www.epa.gov
•   www.insideadvantage.com
•   www.nahb.org/efficiencytaxcredit
•   www.recovery.gov
•   www.MakingHomeAffordable.gov
•   www.greenbuild365.org
•   GCA International, LLC [newsletter@gcaintl.com]
•   www.greenhomeguide.com
•   www.homeenergyorg
U.S. Green Building Council

       Regional Offices of USGBC
There must be some money out there…..
          various headlines
• Administration Announces Nearly $8 Billion in
  Weatherization Funding and Energy Efficiency
• Obama Administration Announces $54.8
  Million in funding for Local Energy Efficiency
  Improvements in Indian County. [Alaska]
• Secretaries Donovan and Chu Announce
  Partnership to Help Working Families
  Weatherize Their Homes
      Tax Incentives will Vary by:
•   Tax bracket: earned income
•   Size of household
•   Type of household: single-family, etc.
•   Status of the property: old, new, historic
•   State, neighborhood, and zone
•   States’ share of Recovery Act Funding
Funding Levels and Allotments from The Recovery Act
    [reprinted with permission from:] District Lines
    - Winter 2009 - page 3
    Historic Districts Council
                                                       THE SILVER LINING:
    the National Register of Historic Places create the ideal combination of physical protection
    and financial assistance that owners need to preserve and maintain their historic property.
    When districts are listed or become eligible for listing on the National Register, owners can
    qualify for a number of financial incentives. What this means in plain English for owners of
    locally designated and National Register-listed properties is that preservation is not simply
    about government encroaching on property owners rights, but rather becoming the
    economic engine for enhancing the properties themselves. Some of these incentives include:
•   Federal Investment Tax Credit Program for Income Producing Properties
      – Owners of income producing properties can receive a 20 percent federal income tax credit for
        the cost of substantial approved rehabilitation and restoration work.

•   New York State Historic Tax Credit Program for Income Producing
    Properties [NY is an example, there are similar programs in most states]
      – Once approved to receive the federal credit, owners become eligible for a state tax credit
        equal to 30 percent of the value of the federal credit.

•   New York State Historic Homeownership Rehabilitation Tax Credit
      – Rehabilitators of owner-occupied buildings located in a distressed census tract, designated as
        a target area under Section 143 ( J) of the Internal Revenue Code, can receive a tax credit
        equal to 20 percent of the cost of repair work.

•   Preservation Easement Tax Incentives
      – By donating a preservation easement on the exterior of the property to a qualified
      Green Building and Design

• Green building means improving the way that homes
  and homebuilding sites use energy, water, and
  materials to reduce impacts on human health and the
  environment. Building a green home means making
  environmentally-preferable and sustainable decisions.
• Did you know that a typical home throughout the
  building process emits four times the polution
  [greenhouse gas emissions] of the typical car? While it
  is being built and over the many years it will be lived in
  this adds up to a HUGE number!
            Materials that qualify
             for tax incentives
• “By designing buildings to be energy efficient, these
  architectural and engineering firms are leading the way
  in the fight against global warming,” says Deborah
  Jordan, EPA’s Air Division director for the Pacific
• To earn the ENERGY STAR, a home must meet
  guidelines for energy efficiency set by the U.S.
  Environmental Protection Agency. These homes are at
  least 15% more energy efficient than homes built to
  the 2004 International Residential Code (IRC), and
  include additional energy-saving features that typically
  make them 20–30% more efficient than standard
      Geothermal Heat Pumps
• Homeowners may claim a 30% credit on
  qualified expenditures for a system that
  services a dwelling located in the U.S. and
  used as a residence by the taxpayer. The
  maximum incentive is $2,000.
Heat Pump Water Heater add-ons
• These units qualify for the 30% Fed. Tax credit
  and may also qualify for local incentives.
                   Heat pump water heaters are actually add-on
                   components that work with existing storage water
                   heaters. According to manufacturer E-Tech, "a heat
                   pump water heater operates like your home heat
                   pump air conditioner, but instead of heating and
                   cooling air, it heats water." Whereas standard water
                   heaters convert fuel into heat, which is then
                   transferred to water, heat pump water heaters
                   harvest heat from the air surrounding the unit and
                   transfer it directly to the water. The water courses
                   through the heat pump water heater where it is
                   initially warmed, and then flows back into the
                   storage tank.
      Solar Energy

The Recovery Act tax credits for solar energy systems and fuel cells have
been extended to 2016. New tax credits were established for small wind
energy systems and plug-in hybrid electric vehicles. Tax credits for builders
of new energy efficient homes and tax deductions for owners and
designers of energy efficient commercial buildings were also extended."

                        • Home builders will receive a tax
                          credit of $1,000 for a house that
                          reduces heating and cooling
                          consumption by 30% and a
                          $2,000 credit for meeting a 50%
          Solar Panels and SES
• Solar energy systems [SES]
  are currently offered in
  seven different sizes: 3kW,
  5kW, 10kW, 15kW, 30kW,
  60kW, and 120kW.
• Numerous manufacturers
  and representatives exist in
  all parts of the country.
  Make sure they offer
  EnergyStar rated systems.

• Energy efficient doors,
  whether for new construction or remodeling qualify for a
  tax credit. They must be approved brands and models.
• Most of the major door manufacturers make retrofit and
  new construction doors using Forest Stewardship Council or
  similar certified lumber. Two examples are Marvin and
  Pella. Also, take a look at doors that are made for energy
  conservation. Fiberglass doors with highly insulating foam-
  plastic interiors look good, take finishes well, and hold up
  better than wood or steel doors (durability being an
  ecological virtue, too). One brand that is well-insulated and
  Energy Star–rated is Therma-Tru. Marvin and Pella also
  make Energy Star–rated products.
• In all types of building structures, ceilings have
  historically been a huge drawback when it
  comes to LEED certification. Now with the
  new Recovery Act incentives and more ceiling
  products being certified as recyclable, made of
  [or partially of] recycled materials and
  containing no VOC or asbestos, there are
  many reasonable choices. A list of qualifying
  ceiling materials is available from the USGBC.
•                            There are two leaders in the
                              green ceiling market:
                                    • Armstrong
                                    • Hunter Douglas
Anita Snader, Armstrong
Environmental Manager
    Armstrong is a founding member and active participant in FloorScore - a voluntary
    certification program that identifies flooring and ceiling products that meet
    stringent air quality requirements for low emitting building materials.
Hunter Douglas
   GreenScreen® fabrics are the first line of PVC-
   free solar shading fabrics designed exclusively
   for internal and external roller shades and
   solar control systems. It is the only line of PVC-
   free contract fabric to offer a high level of
   sustainability while maintaining FR
• Eco-friendly flooring, whether for new
  construction or remodeling may qualify for a
  tax credit. They must be approved brands and
  styles. Much is determined by LEED
• Tax credits must demonstrate the increased
  energy efficiency in the property may using
  the material: reclaimed, renewable and
  recyclable materials are good choices.
• There are no specific Recovery Act tax
  incentives for carpet, but many carpets have
  LEED certification [points] attributes. There
  are also numerous carpet recycling programs
  and carpets made from recycled or recyclable
• Some states and local municipalities have tax
  incentive programs for the use of such
   Greenworks: recycles carpet
At its Greenworks Center in Chatsworth, Georgia, Mohawk also
recycles old carpet removed from office buildings and homes across
the country, and then processes it into the plastics industry as well as
other applications such as carpet cores. Carpet is rolled around these
cores for transportation and storage. Typically, carpet cores are made
from cardboard and discarded after each use. Mohawk saves
thousands of trees every year by making reusable plastic cores from
post-consumer materials.
Mohawk can process all major types of synthetic
 carpet fiber: nylon, polyester, and polypropylene.
 What‘s more, the Mohawk Greenworks Center
uses patent pending technology to process 100
 percent of the carpet –fiber, backing, and latex
— and recover 90 percent of all materials for reuse.
         Mohawk‘s Commitment
Mohawk Industries focuses on environmentally friendly
business practices that benefit the consumer, the
environment, and the bottom line. For example, since 1999,
Mohawk has recycled more than 17 billion plastic bottles for
use in its PET (polyethylene terephthalate) carpet. With
increased consumer interest in protecting the environment,
Mohawk wants consumers to know that there are a variety
of high-quality green options when it comes to flooring.
 Mohawks‘ everSTRAND(TM) PET carpet is made from 100
  percent post-consumer materials. The Company extrudes
   the PET fiber from the three billion plastic bottles that it
   recycles each year — that‘s one in every four recycled
               plastic bottles in North America.
  SmartStrand and Dupont Sorona
   In a partnership with
   DuPont, Mohawk will        Lee‘s GREEN carpet backing:
      launch its carpet       Unibond U2™, the new
featuring SmartStrand(R)      generation of Unibond®. A
     with DuPont(TM)          revolutionary, thermoplastic
   Sorona(R) renewably        and fully recyclable broadloom
sourced polymer this fall.    backing system, Unibond U2
     Not only does this       couples world-class
  luxuriously soft carpet     performance with industry-
  offer extreme durability    leading sustainability. The
  and revolutionary stain     backing system is 50 percent
   protection, it will also   less dependent on petroleum-
 soon be partly produced      based products, and
   from renewable corn        incorporates a rapidly
    sources rather than       renewable bio-based resin.
                 Wood flooring
• Bamboo, linoleum, cork, reclaimed wood, wood
  substitute flooring like coconut palm,
• What it is: Lumber from sustainable sources;
  natural beauty and durability without the guilt.
  Choices in environmentally friendly flooring range
  from certified lumber harvested under Forest
  Stewardship Council guidelines to recycled and
  engineered wood.
• What makes it green: FSC certification, which
  tracks lumber to sustainably harvested sources.
  Recycling: Repurposed wood comes from such
  sources as old barns, wine tanks, or trestles.
  Technology: Green home ideas• Eco-friendly
  kitchen counters • Nature's own flooring •
  Alternative to wood • Low flow, high
  style Engineered flooring maximizes supplies by
  bonding veneers on a plywood base.
 Ceramic and Stone Tiles
» What it is: Made of ceramic, glass, or stone, tile has unrivaled
  durability. It works in high-traffic areas such as entries, kitchens, and
  hallways. Manufacturers now offer more floor tiles with the look and
  color range of stone, ceramic tile, terra-cotta, or terrazzo, but with
  recycled content.
» What makes it green: Recycled-content tile makes use of
  otherwise wasted by-products diverting glass, used tiles, granite
  dust, stone tailings, or unfired material from landfills and offsetting its
  high "embodied energy" cost (price of energy required to get a
  product from its source).
 Counters and Backsplashes

Oceanside Glass tiles
  backsplash wall

                        Fortis Arbos Wood Mosaics backsplash
Vetrazzo worktop

                   Squak Mountain Stone worktop
Paint and other surface applications
• Eco-friendly surface applications, whether for
  new construction or remodeling may qualify
  for a tax credit. They must be approved brands
  and styles. Much is determined by LEED
  qualifications: low of no VOC, etc.
• Surface materials such as paint must be used
  as a part of a larger energy-efficient upgrade
  or new construction to qualify.
      Environmentally friendly paint
•   Environmentally friendly low-VOC [0-50] paints are becoming the
    popular choice for a variety of reasons, most notably because they lack
    odor. These paints are formulated to meet modern indoor air quality
    standards. Because of this, the room can be put back into use almost
    immediately after being painted. In addition, since they are not
    considered hazardous waste, consumers can take pride in knowing that
    they are not harming the environment when disposing of any leftover
    paints. This nature-inspired trend lends itself particularly well to
    designing multiple color schemes, with a nod toward how colors
    naturally fit together. For example, by combining pale beige with a
    brighter, true blue recreates the look of earth and sky. On the other
    hand, create the appearance of a sun-dappled forest by complementing
    a muted green wall color with burnished gold metallic trim.
•   Benjamin Moore: EcoSpec and Natura
•   Sherman Williams: GreenSure
•   Pittsburgh Paint and Glass: Pure Performance
•   Coronado: Air-Care
             Soft treatments
• Eco-friendly and energy efficient window
  treatments, whether for new construction or
  remodeling may qualify for a tax credit. They
  must be approved brands and materials.
• Much is determined by LEED qualifications.
• Again, most new draperies are not going to
  qualify for the Recovery Act tax credits unless
  they are in integral part of a reduced energy
  program for the property.
            Hard treatments
• 30% of cost up to $1,500.00 by the end of
• Installation costs are not included.
• Qualifying manufacturers only:
  – Comfortex
  – Hunter Douglas
  – Graber
  – Levelor
to previous page
Hunter Douglas
           Plumbing fixtures
• Eco-friendly and certified Water Sense
  fixtures, whether for new construction or
  remodeling may qualify for a tax credit. They
  must be approved brands and styles. Much is
  determined by LEED qualifications:
Water Efficient Options for
Indoor Water Use
Water-Efficient Products:

 2.0 gpm or less        Faucets: with 1.5
                        gpm aerator
                                                Toilets: 1.28 gpf       Waterless Urinals
                                                 or less (HETs)

 Clothes Washers:        Dishwashers:         Hot water recirculation       Irrigation
 Water Factor ≤ 6.0   5.8 gal/cycle or less    systems/instant hot         Controllers
                                                   water units
• Whirpool Green Touch™ Program
• Whirlpool Corporation has a program to help make
  designing, building and marketing sustainable homes
  simpler. The Green Touch™ Program provides you with
  easy-to-specify appliance packages and meaningful
• Appliances that save energy, conserve water and support
  indoor air quality are necessary components of a
  sustainable home. When you choose an appliance package
  from the Green Touch™ Program, you are contributing
  toward sustainable building practices that make a
  difference—without sacrificing what your homebuyers
  count on: quality, the right style and performance.
    Whirlpool Brands with EnergyStar
•   Gladiator® GarageWorks
•   Jenn-Air
•   KitchenAid
•   Maytag
•   Whirlpool
•   Amana
•   There are over 300 products that qualify
         Sub-Zero was the first
          ―Green‖ appliance
• For Sub-Zero, green is more than just an Energy
  Star rating. Even the largest refrigeration
  product, the Sub-Zero PRO 48, uses less energy
  per month than a 100-watt light bulb. From being
  built in the USA, to supporting organic farmers
  and food artisans, to using renewable energy, to
  extensive recycling, to sourcing environmentally
  friendly materials and supplies, - Sub-Zero &
  Wolf have been ‗green‘ long before the term
  even existed.
Green Kitchens

             Tax credits are available
             For EnergyStar appliances
             and WaterSense plumbing
             fixtures along with many
             LEED points for eco-friendly
             cabinetry, stone, ceramics, glass and other
             surface materials. There are layers of credits
             available from Fed. Tax deductions to local
             incentives and utility company programs.
                            Neff cabinets
   Ontario-based company Neff uses marine-grade plywood, a
  waterproof product that isn't treated with chemicals, rather than
formaldehyde-laden particle board. The cabinets have very low-to-
  zero Volatile Organic Compound (VOC) emissions and run the
              design gamut from traditional to modern.
                                   Henrybuilt cabinets
    With offices in Seattle and New York, Henrybuilt offers clients the option of
  choosing a cabinet system from the company's modular lines (one of the few
 green cabinetry companies to have these). Its products are crafted from rapidly
renewable bamboo or FSC-certified woods, and are formaldehyde free. The best
part for us is that Henrybuilt is happy to work remotely, sending plans and designs
            over email and finally shipping materials for overseas clients.
Water Heaters

 Green builders also can select the most efficient models based on
 national recognitions and standards. Energy Star recently
 established a residential water heating program to recognize gas,
 whole-home tankless water heaters with an energy factor (EF) of
 0.82 or better, gas condensing units with an EF of 0.80, and electric
 heat pump water heaters with an EF of 2.0. So far, however, Energy
 Star has not recognized electric tankless water heaters, which
 typically have an EF of 0.98 to 0.99 compared to 0.91 to 0.95 for an
 electric tank unit, because it is still a small market and the energy
 savings are too low, according to Energy Star.
 Builders also can earn two points toward LEED certification if the
 gas unit has an EF of at least 0.80 or an electric tankless unit has an
 EF of 0.99. The National Green Building Standard awards points for
 whole-house tankless units that are either direct-vented or power-
 vented to improve indoor air quality and minimize contamination
 from combustion byproducts.
Heating and Cooling [HVAC]

          ECR International.Freewatt (at left)
          is a home heating system that is a
          green alternative to traditional
          products. Designed for heat and
          power, the natural-gas unit
          combines an Energy Star-rated,
          high-efficiency natural gas furnace
          or boiler with a Honda generator
          so electricity can be used to power
          the home or sold back to the grid.
          888.800.1551. www.freewatt.com.
Energy efficient heating, cooling, ventilation and hot water supply partially qualify a
property, within the meaning of Section 2.01 of Notice – 160920-05 (Notice 2006-52) that
satisfies both of the following conditions: 1) The property is installed as part of the heating,
cooling, ventilation and hot water systems of a building; and 2) It is certified that the
heating, cooling, ventilation and hot water systems that have been incorporated into the
building, or that the taxpayer plans to incorporate into the building subsequent to the
installation of such property, will reduce the total annual energy and power costs with
respect to combined usage of the building’s heating, cooling, ventilation, hot water and
interior lighting systems by 16 2/3% or more – meeting the minimum requirements of
Standard 90.1-2001. The required 16 2/3% reduction must be accomplished solely through
energy and power cost reductions for the heating, cooling, ventilation and hot water
systems. Reductions in any other energy uses, such as receptacles, process loads,
refrigeration, cooking, and elevators, are not taken into account in determining whether the
16 2/3% reduction achieved.

Homeowners are eligible for tax incentives for solar water heating and photovoltaic system
tax credit is for 30 percent of the cost of the system, up to $2,000. Builders are eligible for a
$2,000 tax credit for a new energy-efficient home that achieves 50 percent energy savings
for heating and cooling over the 2004 International Energy Conservation Code (IECC). But at
least one-fifth of the energy savings must come from building envelope improvements.
There is also a $1,000 tax credit to the builder of a new manufactured home which achieves
30 percent energy savings for heating and cooling over the 2004 IECC.
     Exterior surface materials
• Many eco-friendly and energy efficient
  exterior construction materials qualify for tax
  incentive programs. The list of qualifying
  product is growing weekly and the latest
  information can be found at either EPA or
  USGBC’s websites.
• Most of these products can be installed like,
  and have the appearance of traditional
  exterior materials.
The requirements to qualify for the new energy tax credit include: Windows purchased
must be equal to or below a U-Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC)
of 0.30.
The purchase of the qualified windows must be made during the taxable year for which
the credit is being claimed.
The credit is only allowed on the price of the qualified windows themselves, not on
installation costs, onsite preparation, assembly or sales tax.
The tax credit is allowable only for qualified window units placed in service in 2009 and
Homeowners must save their receipts for their windows purchased along with all
window labels and stickers for verification and tax recordkeeping.
The windows must be installed in the taxpayer's principal residence.

•   Energy efficient windows, whether for new construction
    or remodeling qualify for a tax credit. They must be
    approved brands and models: Simonton, Pella,
    Anderson, and more [specific models]

• Energy efficient siding materials, whether for
  new construction or remodeling qualify for a
  tax credit. These have different constraints
  because the siding needs to also be eco-
  friendly. They must be approved brands and
  model. Rankings are based on
•              the “R” rating,
•              raw materials, &
• shipping. shipping distance.
• The Clean Energy Stimulus and Investment
  Assurance Act of 2009 [introduced by Sen.
  Maria E. Cantwell (D-Wash.) intends to create
  green-collar jobs and revitalize the economy
  through clean energy investments. But the bill
  also provides financial incentives for
  homeowners or commercial building
  owners which chose to install green roofs on
  their buildings. 30% of upgrade cost.
              Wind Turbines
• residential wind turbines qualify for a $4,000
• Bergey Windpower is advertising a 30% tax
  credit for their products:
           •This is a technology that has a huge backing in Washington,
           but some local constraints have not really been addressed.
           • Many municipalities and platted subdivisions have
           covenants restricting the installation of free-standing
           energy sources.
           •It is virtually impossible to install wind turbines in a federal
           urban historic district.
   Whirlwind Solar Energy Systems,
   Inc. www.whirlwoindsteel.com
• Whirlwind considers itself an industry leader when it comes to
  energy efficiency in metal roofing. Offering three different product
  lines, Whirlwind currently has 10 energy approved colors on the
  Agricultural/Residential line, 12 on the Commercial/Industrial line,
  and 7 on the Standing Seam/Architectural line. In addition to energy
  star approved colors, Whirlwind also offers Cool Roofing, which has
  been proven to save up to 40% on your cooling costs by installing a
  Cool Metal Roof. Whirlwind’s feature color that meets all
  requirements for Title 24, Energy Star, and CRRC is Cool White. Cool
  White has a Reflectivity rating of 0.75, an Emissivity rating of 0.86,
  and a Total Reflective Index of 91.7. In addition to Cool White,
  Whirlwind also offers Solar White has a Reflectivity rating of 0.7, an
  Emissivity rating of 0.85, and a Total Reflective Index of 85.1. In
  addition, all Whirlwind material contains a minimum 32% up to 59%
  total recycled content, which also qualifies for the recycle credit
  under USGBC LEED-NC v2.2.
• There are credits in the following categories:
  – Lighting
  – Water conservation
  – Paving materials
  – Plant material choices
  The EPA is regulating these credits and many are
    being offered locally, so the incentives differ. Most
    are based on LEED standards.
         Lighting fixtures
 The products qualify for a 30% tax
   incentive, not the installation.
• Lamps: To qualify for Energy Star, compact
  fluorescent fixtures *CFL’s+ must have specific
  pin-type bases, called GU24, that fit only CFLs;
  these fixtures prevent homeowners from
  reverting to incandescent. While slightly more
  expensive, pin-based CFLs withstand heat
  better than screw-in CFLs, and should last for
  10,000 hours, or about seven years of normal
  use, versus about 6,000 hours for screw-in
•   LEDs
•   A much different source of light than incandescent or CFLs, LEDs (light emitting
    diodes) are actually tiny, encapsulated semi-conductors that can last for 30,000
    hours to 50,000 hours or more.
•   While LEDs are widely known as colored indicator lights in items such as computer
    monitors or car dashboards, in recent years manufacturers have begun to offer
    them in shades of white and grouped in the shape of a light bulb so they can be
    screwed into traditional fixtures or replace incandescent downlights. But they’ve
    been most successful so far as accent lights built into a fixture or surface.
•   While LEDs are not yet as efficient as compact fluorescents—their efficacy is
    between 30 lumens per watt and 60 lumens per watt—manufacturers and
    government researchers are investing millions of dollars in advancing them. LED
    efficiency is improving by about 100% every 24 months, estimates Joseph A. Rey-
    Barreau, a lighting designer and associate professor at the College of Design at the
    University of Kentucky. “In five to 10 years, it may be the most predominant light
    source everywhere,” he says.
•   At five to 10 times the cost of compact fluorescent fixtures, large LED fixtures are
    still out of the price range of most residential applications. But designers say they
    are using small LEDs in cove, undercabinet, and step lighting applications. In years
    to come, organic LEDs (LEDs stretched into thin films) could change the way we
    see lighting entirely, allowing designers to stretch a light source across a wall or
    ceiling and turning fixtures and sockets into a remnant of the past.
• Halogen
• While CFLs are generally the most energy- and cost-
  efficient option, they’re still not the best choice where
  color quality or dimmability is most important. Halogen
  lights, a more efficient form of incandescent, provide
  warm, bright light and are fully dimmable, meaning
  they may be best for applications such as dining rooms
  or reading lights where color quality is the biggest
  concern. Philips Lighting’s Halogena, for example,
  offers energy savings of about 30% over standard
  incandescent, and are rated to last about 3,000 hours.
                    Lighting controls
•   Lighting Controls
•   Efficient lighting goes beyond the bulb, with simple control systems that
    help save energy with little notice by the homeowner.
•   Switched motion sensors or dimmers should be used with any remaining
    fixtures that still use incandescent sources; they also can be used with
    energy-efficient sources. Switched motion, or vacancy, sensors must be
    manually turned on, but they automatically shut off after a period of time
    with no motion in the room. Dimmers save a percentage of energy slightly
    less than the amount they are dimmed, for both incandescent and
    fluorescent sources (i.e., dimming a bulb 25% saves about 20% of the
    electricity). Energy savings from dimming LEDs is variable.
•   Whole-house, intelligent lighting systems allow builders to automate a
    home’s lighting controls by setting lights to automatically dim 10% or 15%,
    or allowing homeowners to shut off all of a home’s lights with the push of
    a button. Lutron has a control system that includes a “green” button that
    trims light levels down throughout the home.
                       Light Fixtures
•   CFL‘s [Compact florescent Lamps]
•   LED [light emitting diodes]
•   Halogen
•   The light manufacturing industry is not sitting quietly by watching an
    entire 125-year old technology disappear. Something is going to replace
    the billions of incandescent lamps that are sold each year. General
    Electric, the largest U.S. bulb maker, is hoping to introduce by 2010 an
    incandescent lamp projected to be twice as efficient as its traditional
    lamp, and another as efficient as CFLs by 2012.
•   LED Lighting Fixtures Inc. has already introduced, to great commercial
    success, its LR6 downlight with an efficacy of 60 lm/W, which is better
    than many CFLs. It is dimmable, has color rendering close to that of an
    incandescent and fits into standard 6-inch recessed cans. A smaller
    LR4 version should be available by March. The company has also
    developed a prototype PAR-38 lamp using LED technology with an
    efficacy of 113.6 lm/W, higher than any reflector style CFL on the
    market. Although not commercially available, the lamp is an example of
    exciting innovations to come.

 Rigid foam, spray foam
 Foam insulation
 Cellulose insulation
 Fiberglass matting
 Mineral Wool

 All types qualify for the 30%
 tax incentive [$1,500 cap], but
 not all brands.

 Insulation costs of insulation
 are covered.
                        Insulated Panels

Consisting of solid one-piece pre-cut SIP units, the Insulspan Structural Insulated Panel
System comes ready to assemble as wall, floor, or roof components, reducing
construction time and improving efficiency, the company says. According to the firm, the
system's roof and wall assemblies offer a 40 percent to 60 percent reduction in heat loss
and significantly reduce air leakage. 800-726-3510. www.insulspan.com.
         Take it a step further
• Many of the materials and practices that for
  two years will qualify for tax incentives also
  take you steps further towards LEED
  certification of a project.
• The qualifying items parallel the LEED
• There are also local and state rebates available
  from governments and local utilities
• ―LEED has emerged over the last few years as
  the [green building] system of choice for many
  purchasers and governments. It has stringent
  requirements and high standards for those who
  supply, build and operate those buildings.‖
  Frame was speaking during a briefing at COCA‘s
  recent annual general meeting. The point-based
  LEED system for rating the ―greenness‖ of
  buildings is the most widely used in North
    What is LEED and why should I
            know about it?
• As with any design specialty, green design needed its
  own standards. LEED (Leadership in Energy and
  Environmental Design) is a voluntary, consensus-based
  collection of national standards for developing high-
  performance, sustainable buildings and interiors. It has
  become increasingly recognized by professionals as a
  complete framework for assessing building performance
  and meeting sustainability goals. Developed by USGBC,
  there are currently four available LEED standards:
  LEED-NC for new construction and major renovation
  projects; LEED-EB for existing building operations and
  maintenance; LEED-CI for commercial interiors projects;
  and LEED-CS for core and shell projects. USGBC also
  offers a comprehensive system of professional
  accreditation, training and practical resources.
• From a contractor‘s perspective, a LEED project requires
  additional ―thinking‖ time when it comes, for example, to
  sourcing products — credits are given for using materials
  with recycled content and selecting items manufactured
• ―Implementation of a waste-management plan may
  require a bit more work on the contractor‘s side, but
  usually ends up being cost-neutral or resulting in
Leed Policy Manual
Leed Rating System
Leed Rating System
       LEED Residential Guide
• The LEED for Homes Reference Guide, a
  comprehensive tool for residential builders using the
  LEED for Homes Green Building Rating System, is now
  available for purchase online at www.usgbc.org/store

  The reference guide offers over 350 pages of
  information, resources and standards for the LEED
  credits covered within the residential green home
  certification program.
  The cost is $100 for members of the U.S. Green Building
  Council and $125 for non members, plus shipping and

• Publication date is April 2008
Leeds Project Summary Form
                            LEED Stats
•   Green States
    Top 5 states with LEED-registered homes
    New Mexico
•   Top 5 states with LEED-certified homes
     –   California
     –   Oregon
     –   Michigan
     –   New York
     –   Maine
•   LEED for Homes Certification Breakdown
    Certified: 24%
    Silver: 40%
    Gold: 22%
    Platinum: 15%
Indoor Water Use in Homes

                          US Average          Base Home          Water Efficient
    Indoor Use Area
                        (AWWARF Study)         (EPAct)              Home
   Toilets                   18.6                  8.2                 6.5
   Clothes Washers           15.0                  12.9                7.4
   Showers                   11.6                  8.9                 7.1
   Faucets                   10.9                  10.9                6.6
   Leaks                      9.5                  9.5*               9.5*
   Dishwashers                1.0                  0.7                 0.4
   Other                      2.7                  2.7*               2.7*
               Total:      69.3 gpcd          53.8 gpcd            40.2 gpcd

 *left the same for comparison.

                                       15.5 gpcd             13.6 gpcd

                                                   Gpcd = Gallons per capita per day
Green Home Ratings

LEED for Homes

•   What is LEED for Homes?
     – LEED = Leadership in Energy and Environmental Design
     – Developed by US Green Building Council

•   LEED-H Water Efficiency (WE): at least (3) points are required
     – Water Reuse                      5 points
     – Irrigation System                4 points
     – Indoor Water                     6 points total:
                                                            Certified:   45 points
         • All Faucets ≤ 2.0 gpm          1 point
         • All Showerheads ≤ 2.0 gpm      1 point
                                                            Silver:      60 points
         • All Toilets ≤ 1.3 gpf          1 point           Gold:        75 points
                                                            Platinum:    90 points
         • All Faucets ≤ 1.5 gpm          2 points
         • All Showerheads ≤ 1.75 gpm     2 points
         • All Toilets ≤ 1.1 gpf          2 points
Green Home Ratings

NAHB Green Homebuilding Guidelines
•   What are the Green Homebuilding Guidelines?

     – Developed by NAHB in cooperation with Green Building
       Initiative to be a more workable alternative to LEED-H.

•   Indoor Water Efficiency: at least (6, 13, or 19) points are required
     –   On-demand hot water                     6 points per unit
     –   Hot water pipes ≤ 30 ft.                9 points
     –   Energy Star water saving appliances     7 points each
     –   Showerheads below code                  2 points each
     –   Lav faucets below code                  2 points each
     –   Toilets below code                      4 points
     –   Dual flush toilets                      6 points          Bronze: 237 points
     –   Pedal/sensor faucet shutoff             6 points          Silver: 311 points
     –   Graywater reuse                         6 points
     –   Composting/waterless toilet             6 points
                                                                   Gold: 395 points
How does the Gov rate green?
How do you build points towards
     LEED certification?

Raw Materials

• Look for:
   – Natural materials vs.
   – Sustainably
   – High recycled content
   – No to low VOCs in
   – Lower weight
   – Minimum shipping distance
   – Recyclable packaging
   – No off gassing

        Energy Efficiency   EnergyStar

         Water Efficiency   WaterSense

            Cleaners        GreenSeal

        Sustainable Wood       FSC

            Cabinetry         KCMA
State Agencies and Utility Companies
• Since each state and municipality will vary as to
  the qualifications and incentive programs, I would
  suggest a web search for the specific location. A
  few phone calls will also help.
• Each state government website has a tab for
  energy credits and tax incentives.
• Many utility companies have on-going rebate
  programs. These are available from the websites
  or with a phone call.
• Make sure to confirm the programs before
  “selling” them to a client.
       Recovery Act Inclusions
• The Federal package includes $300 million
  that states can use to sponsor utility rebates
  for the purchase of energy-efficient appliances
  (also 15% to 20% more efficient than
  standard) and for tax credits for installing solar
  panels and solar water heaters.
    States with Tax Incentive Programs
• Colorado Housing and Finance Authority (visit www.chfainfo.com)
• Idaho Housing and Finance Association (visit www.ihfa.org)
• Kentucky Housing Corporation (visit www.kyhousing.org)
• Missouri Housing Development Commission (visit www.mhdc.com)
• New Jersey Housing and Mortgage Finance Agency (visit www.nj-
• New Mexico Mortgage Finance Authority (visit

•   Ohio Housing Finance Agency (visit www.ohiohome.org)
•   Pennsylvania Housing Finance Agency (www.phfa.org)
•   Tennessee Housing Development Agency (visit www.thda.org)
•   Partial list
When a project is done, what do you
do to extend tax incentive activities:
• Donate materials for reuse
• Clean the construction site in a green mode
• Implement permanent waste removal
  – Recycle
  – Reuse
  – Reclaim
• Practice green property management
              Non-Profit Agencies
• Habitats for Humanity is probably the most famous nation-
  wide group, but there are others like Lighthouse and strictly
  local, smaller groups. Many come with volunteer
  manpower and transportation. They are easy to find on the
  internet or the phonebook. Some even advertise.
• The tax deduction of donated materials is based on the
  wholesale value.
• You don’t need to look far for organizations that will accept
  the donation of:
   – Unused construction materials
   – Recyclable materials
   – Old cabinets, flooring, lighting, gutters, etc.
Watch for these product labels

            flooring, tile,
            furniture, carpet,
            textiles, lighting

                          furniture, textiles
             Energy-Efficient Mortgages

Energy-Efficiency Mortgages
Typically, these mortgages offer better terms for buyers of green homes, such as slightly
lower closing costs and interest rates. Most require that the home have a green certification
from a well-recognized organization.
The energy-efficiency mortgage doesn’t provide money to the builder, but it does allow
buyers to qualify for larger mortgages, typically 5% to 8% more, which can help the pro sell
more green homes, VanderWerf said.
But, he cautioned, it is hard to find out if lenders offer energy-efficiency mortgages because
even if a national lender has a program, local branches often don’t know about it.
“Local lenders deal in five to 10 types of mortgages,” he noted, advising pros to always verify
with a mortgage company that it offers energy-efficiency mortgages before sending clients
there. And if a lender doesn’t offer energy-efficiency mortgages, ask it to develop a product,
he said.
 Energy-Efficient Mortgages offer
homeowners a tax deduction and a
  way to finance improvements
   Select improvements to be covered
                             Figure 2 shows a sample EEM report. The full set of
                             recommended improvements costs almost $8,900, with
                             a lifetime savings of over $11,000. The homeowner
                             would have to select a subset of those improvements
                             that is less than the EEM ceiling for the property, either
                             5% of the appraised value, or $8,000. Note that each
                             individual improvement does not have to realize a
                             lifetime savings; only the combined package of
                             improvements has to do so.
                             Typically, EEMs are used to purchase or refinance
                             existing homes. You can also use an EEM to purchase a
                             new, already energy-efficient house. In those
                             circumstances, the only real benefit is that the
                             qualification ratios are stretched from 29% and 41% to
                             31% and 43%, letting you qualify for a larger mortgage.
                             There are also EEM programs, with higher limits and
                             different requirements, for renovating properties.
Information provided by HomeEnergy.Org: March/April magazine, Steve Mann author
 Thank you for joining me.

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