Posted by David Hamilton on November 30th, 2009

I’m taking some time this fall to complete my LEED-AP certification (this is the primary credential of the U.S. Green Building Council).  I was about to take the darned test a couple of days before we submitted our Preliminary Plat for Bundoran Farm, a few years back, and somehow haven’t found the time since joining the Bundoran Farm team.  In my review course, I had an excellent conversation with a builder from Vermont, who began ticking off all the tax credits and incentives available for green homebuilding.  I knew there were a lot of these incentives, and had taken advantage of a few when I built my home, but the economic stimulus bill has greatly expanded and deepened the value of incentives available.  I found the conversation incredibly helpful, and thought the Bundoran Farm community might appreciate a brief outline:

I am not an attorney, a legislator or a homebuilder.  Please confer with your tax advisor and building professional regarding your project’s eligibility for these incentives.  Do not staple this blog entry to your tax return.

The first and easiest step is to consult with your homebuilder, who may be eligible for a tax credit of up to $2,000 for constructing a green home that meets certain specifications.  This builder credit may affect the feasibility of some of the refinements below, if your builder is knowledgeable enough about the law.

Second is a one-year tax credit of up to $1,500 for building envelope improvements (to existing primary residences only) like windows and doors, insulation or roofing, installed by December 31, 2010.  The one-year cap is significant, but can be doubled if your construction runs through two tax years (purchase your roofing in December and windows in January).

Also falling under the category above are upgraded HVAC systems, including split systems rated “Tier 3″ by the Consortium for Energy Efficiency, geothermal units and “Tier 2″ package systems.

For those of you with more ambitious carbon-neutralizing goals, the federal government has decided to reward your outsized ambition with a third type of credit for alternative energy.  Significantly, this credit has no cap, and simply covers 30% of qualified expenses for the installation of active solar and wind power systems.  This larger credit is also available for new construction of primary residences.  Considering that a good wind system could cost you upwards of $20,000, this credit also appeals to those for whom free money is too good to pass up.

As with many of the serious financial decisions we make when we build homes, no single factor usually guides the decision.  Initial installation and operating costs must be balanced against operational payback, maintenance, and the all-important “cool factor.”  Still, the numerous incentives out in the tax code now may sway your decision.  If so, you’ll want to be sure to have the team on board to not only design and install these types of improvements, but also to help you navigate the ensuing paperwork.

Happy green building…

Filed under: Architecture and Design, General, Green Building