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Department of the Treasury Releases Rules for Federal Residential Energy Efficiency Tax Credits
Energy Efficient Homes
Under the provision for energy efficient homes, an eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. The credit is available for all new homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards.
The home qualifies for the credit if:
It is located in the United States;
Its construction is substantially completed after August 8, 2005;
It meets the statutory energy saving requirements, and
It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2008, for use as a residence.
This was extended to December 31st, 2008 (the date that the house is inspected and built).
In general, to meet the energy saving requirements, a home must be certified to provide a level of heating and cooling energy consumption that is at least 30 to 50 percent in the case of manufactured homes, and 50 percent for other homes below that of a comparable home constructed in accordance with the standards of the 2004 Supplement to the 2003 International Energy Conservation Code. It must also have building envelope component improvements providing a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home.
Manufactured homes can also qualify for the credit by meeting Energy Star standards.
Site-built homes qualify for a $2,000 credit if they reduce energy consumption by 50 percent relative to the International Energy Conservation Code standard. Manufactured homes qualify for a $1,000 or $2,000 credit depending on the level of energy savings achieved. The guidance provides information about the certification process that a builder must complete to qualify for the credit. The guidance also provides for a public list of software programs that may be used in calculating energy consumption for purposes of obtaining a certification.
In late May, 2006, Enercomp requested that RESNET revise its rules to use the normalized modified loads approach contained in the full RESNET documents. This change is needed to properly value heating vs. cooling energy when gas heating is used. Read Enercomp's letter here. RESNET has responded that it will change the rules in this letter. At this time, however, RESNET/IRS/DOE have not yet published the corrected rules.
If you have any questions about IRS Energy Tax Credit, please call Mark Gallant at Haynal and Company at 760-743-5408.
Please check back for more information.