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New and Notable

November 01, 2005
November/December 2005
This article originally appeared in the November/December 2005 issue of Home Energy Magazine.
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Residential and Commercial Energy Efficiency Tax Incentives

After five years of struggle, Congress last summer enacted comprehensive energy legislation.The focus of the legislation
is on development of oil, gas, and nuclear sources of energy. The energy package signed by President Bush in July 2005 includes measures to spur construction of new nuclear power plants, promote ways to reduce pollution from coal, and provides a boon to farmers by requiring refiners to double the use of corn-based ethanol in gasoline to 7.5 billion gallons a year by 2012.

In addition, the legislation includes provisions for energy efficiency tax incentives. The incentives for energy efficiency include: Improving the efficiency of existing homes. This incentive provides a 10% cost-based credit to homeowners to improve the energy efficiency of existing homes.The maximum credit will be $500 ($300 for windows). The credit will go into effect on January 1, 2006 and expire on December 31, 2007.

New energy-efficient homes. This incentive provides homebuilders a tax credit of $2,000 for homes that cut energy use for heating and cooling (not hot water) by 50% compared to the national model code—2004 International Energy Conservation Code (IECC) Supplement. Builders of manufactured homes can apply for a tax credit of $1,000 for homes that save 30%. The credits will go into effect on January 1, 2006 and expire on December 31, 2007.

Commercial buildings. Commercial buildings that achieve a 50% reduction in annual energy cost to the user will earn a tax deduction not to exceed $1.80 per square foot. Deductions will go into effect on January 1, 2006 and expire on December 31, 2007.

Now that the legislation has passed, the first priority for the Residential Energy Services Network (RESNET), where I work, is to see that clear, effective, and cost effective procedures are adopted by the Department of Treasury for verifying the home’s performance in applying for a tax credit. The legislation requires verification procedures be adopted by the Department of Treasury in consultation with the DOE. RESNET will be advocating for procedures to ensure that the public’s funds are used to achieve verifiable energy savings using the existing infrastructure
of building performance professionals.

David Goldstein works in the air and water program of the National Resources Defense Council and is vice president of RESNET’s Board of Directors. He wrote in a recent article about the prospects of successful market transformation with the available tax incentives. “Market transformation works when each segment of the market—consumers, retailers, suppliers, manufacturers, architects, engineers, and so on—believes that everyone else will be interested in efficiency.
So our own outreach and press on this issue can influence the outcome almost as much as federal dollars. An effective strategy is to project and act with confidence and optimism that we and our allies can make it work.”

—Claudia Brovick
Claudia Brovick is the public affairs director for RESNET.

Summary of Tax Incentives for Energy Efficient Buildings in the Energy Bill is available at www.resnet.us/hotnews/tax_credits/summary.pdf.

Florida Solar Energy Center's EP Act 2005: Opportunities for Conservation and Energy Efficiency can be found at
www.fsec.ucf.edu/epact-05.htm.

For current information on verification procedures, please visit the RESNET Web site at www.resnet.us/hotnews/tax_credits_050801.htm.


RESNET and USGBC Join Forces

In an effort to further promote voluntary market-driven green building programs, the Residential Energy Services Network (RESNET) and the U.S. Green Building Council (USGBC) have entered into a Memorandum of Understanding (MOU). The purpose of the agreement is to define the collaborative relationship between RESNET and USGBC in order to deliver rating services effectively to USGBC’s Leadership in Energy and Environmental Design (LEED) for Homes initiative.

Through this agreement, USGBC commits to work collaboratively with RESNET to refine and improve LEED for Homes policies and accreditation requirements and processes. USGBC will also help RESNET to improve LEED for Homes training and refining, and to improve the LEED for Homes initiative. In turn, RESNET will agree to actively promote the advanced training of rating providers and raters to enable them to qualify as accredited LEED for Homes Program Providers and LEED for Homes Raters. RESNET will also maintain data on LEED for Homes-related training and accreditation completed by raters.

Over the next year, RESNET and the USGBC will work on addressing four issues.These are sharing revenues between the two organizations; sharing information such as a database of certified green raters and ways in which LEED credits are interpreted; encouraging market competition among LEED Home Raters and among other green home rating models; and developing an agreement on quality assurance policies and procedures.

The agreement with USGBC is not exclusive, and RESNET is interested in working with all green building programs that include third-party performance verification as part of their process.

For more information, go to www.natresnet.org.


LEED Expands to Residential Market

The U.S. Green Building Council (USGBC),known for setting the standard for commercial green building through its Leadership in Energy and Environmental Design (LEED) program, has launched a one-year pilot project to demonstrate a new LEED rating system for homes. LEED for Homes is a voluntary program that will recognize and reward the top 25% of green homebuilders.

“The residential market is a new area for LEED and USGBC,” says Rick Fedrizzi, USGBC president, CEO, and founding chair.“The homes market is in line with our mission of transforming the built environment on all levels.These LEED homes will help lower operating costs, increase home value, reduce maintenance issues, and improve indoor environmental quality.”

New homes built to LEED standards will be designed and built to use less water, less energy, and fewer materials. The LEED homes will also provide improved indoor environmental quality through improved controls of pollutant sources and better ventilation and filtration systems.

During the pilot phase, the LEED for Homes certification will only be available in limited geographic locations. To assist home builders in these locations, the USGBC has selected 12 LEED for Homes Providers to furnish marketing, technical, and verification support to home builders. Local and regional organizations, such as Davis Energy Group, Incorporated, in California, and The Alliance for Environmental Sustainability, in Michigan, have been chosen as Providers. These organizations were selected because of their outstanding abilities and proven record of supporting builders in the construction of high performance, sustainable homes. Home builders who are outside of these service areas can contact their nearest Provider to discuss participation in the program.

After the pilot test phase has been completed, the LEED for Homes Rating System will be revised as needed and will then be available to all builders, regardless of location. Builders who are interested in signing up for the pilot program can register online through USGBC’s Web site, or by directly contacting a local Provider.

To download LEED for Homes Pilot Rating System, Pilot Checklist, and local Providers documents, go to
www.usgbc.org/DisplayPage.aspx?CMSPageID=147.

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