Energy Act Tax Incentives for Energy Efficient Construction
How will the energy bill signed by President Bush on August 8, 2005 affect builders of energy efficient housing in the next couple years?
How will you benefit by building with structural insulated panels?
ENERGY ACT 2005: Key Provisions - in a nutshell
- Tax credit for builders constructing new energy efficient homes. The credit is either $2,000 or $1,000 per home, depending on the type of home and the energy reduction standard it meets. The credit will apply to homes completed after December 31, 2005, and which are purchased after December 31, 2005 - but before January 1, 2008.
- Tax deduction for energy efficient commercial buildings meeting a 50% energy reduction standard. The deduction (generally $1.80 per spuare foot, but $ .60 per square foot in some cases) is effective for property placed in service after December 31, 2005 and before January 1, 2008.
What we don't know yet, is what will qualify a new home as energy efficient. We do know that building with an energy efficient building system, like SIPs, will be important. There has been speculation that homes will need to qualify for the Energy Star Seal, meaining that they will have to undergo an energy evaluation and receive a HERS (Home Energy Rating) score 86 or greater. Homes built with Structural Insulated Panels are energy efficient and when built properly exceed Energy Star requirements.
What should you do?
- Consult with your state's Public Utilities Commission. States may vary in qualifications for energy tax incentives.
- Consult with your tax advisor. Find out how the Energy Act of 2005 will affect you.
Check out these links for more information on the Energy Act of 2005:
President Signs Into Law a National Energy Plan
Press Release from Alliance to Save Energy