National Incentives for Energy Efficiency & Green Building

Discover the incentive options readily available to building developers & owners. ReVireo can help you navigate these opportunities to find the best incentives suited to your building type and business.

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tax benefits

Section 45L Tax Credit

for Energy Efficient Homebuilders

Section 45L is a $2,000 tax credit for the development, construction, and sale/lease of new single-family homes, townhomes, and apartments in buildings three stories or less. This tax credit was recently extended through the end of 2021. Legislation has been introduced in Congress to extend the tax credit beyond the end of 2021, while increasing both the requirements and the amount. Historically it has always been renewed and has remained in effect since it was first established in 2005.

To qualify, an eligible dwelling unit must have a projected annual heating and cooling cost that is 50% below the annual energy consumption level of a comparable dwelling unit. Additionally, envelope measures (like added insulation or better windows) must account for at least 1/5 of the savings.

While it may not always be cost-effective for every new home to qualify, there are opportunities to leverage local utility company energy efficiency rebate programs to offset costs to qualify.

This is because:

  • The efficiency requirements for the tax deduction almost always exceed the minimum efficiency requirements of local utility rebate programs.
  • The local utility rebate programs almost always use the same energy modeling software and inspections used for tax deduction.
tax benefits

Section 179D Tax Deduction

for Energy Efficient Buildings

Section179D is a $0.60 –$1.80 per square foot tax deduction for building owners that have installed energy efficient equipment in either new or existing buildings. The tax deduction is applicable to all commercial buildings as well as to apartment buildings that are four stories or more.

The tax deduction is available for demonstrating energy savings from energy efficient technologies in three categories – Envelope, HVAC and Hot Water, and Lighting. Projects can qualify for the full $1.80 sq. ft. by meeting the savings target for each category. Alternatively, projects can earn $0.60 sq. ft. for each category for which it meets the savings target. Additionally, the “interim lighting rule” provides an alternative and streamlined approach for demonstrating savings from lighting.

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While it may not always be cost-effective for every building to qualify, there are opportunities to leverage local utility company energy efficiency rebate programs to offset costs to qualify.

This is because:

  • The efficiency requirements for the tax deduction almost always exceed the minimum efficiency requirements of local utility rebate programs.
  • The local utility rebate programs almost always use the same energy modeling software and inspections used for tax deduction.
PREFERENTIAL FINANCING

Incentive Programs

for Multi-family Buildings

Fannie Mae, Freddie Mac, and HUD each have programs incentivizing green building and energy efficiency for new or existing multi-family buildings. The programs offer reductions in annual interest rates or mortgage insurance premiums of up to 0.35%. Projects can qualify for these discounts by completing a recognized green building certification.

Certifications can be earned during or after construction. Not all certifications are as difficult to achieve as others, and some are very easy and inexpensive to implement. In some instances, buildings can earn a recognized certification after construction by simply benchmarking energy usage.

Separately, Fannie Mae and Freddie Mac also provide better pricing and more funds for existing buildings without a recognized certification that commit to energy efficiency and water efficiency upgrades.

ReVireo offers comprehensive services for all of your business needs.

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Plan Review, Energy Modeling Analysis, & Consulting

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Inspection, Testing, & Verification

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Incentive Management & Supporting Documentation

Energy Efficient & Green Building Projects

Many of our clients have benefitted from national tax benefits and preferential financing. Let ReVireo help you find the best incentives suited to your building type and business.

The Majestic at Watkins Mills & Paramount East/West

Client

HIP Projects, LLC

Location

Gaithersburg, Maryland
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FLOW Chelsea

Client

Bernstein Real Estate

Location

Manhattan, New York City
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Toll Brothers Tri-State Area

Client

Toll Brothers

Building Type

Single Family, Townhomes

Location

New Jersey, New York, Connecticut
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