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The 45L Tax Credit: An Incentive for Green Building

Energy conservation has taken shape due to the obvious need to protect the environment from greenhouse gasses, pollution, and natural resources consumption. One way to preserve energy is to give incentives to people who adhere to this movement and make the necessary upgrades to protect the environment. The US government has done so, by extending the Energy Efficient Tax Credit for Residential Properties (45L tax credit).

They are continuing the incentive until the end of 2016. Each tax preparer will get a tax credit of $2,000 per residential unit or dwelling. To qualify, the building has to be an apartment, condominium, townhouse, or a single family home. This incentive is a great motivator for homeowners and builders alike.

Conserving Power

The green movement is trying to reduce overall energy consumption. Many homes have already installed solar panels or wind turbines, hoping to consume less power by producing it on the grid. Other means of saving energy is by lowering the thermostat during winter months and adjusting it during summer, or properly insulating windows, doors, attics and other openings.

When cleaning the house, it is advisable to do it by hand instead of vacuuming. It will save energy. Additionally, wash dishes immediately instead of piling them up. If using the dishwasher, run it only when it is full of dishes. It will save on water usage and will form the habit of caring for resources on the long term.

If the lights are not in use, it is best to turn them off. Other simple tips include turning off the faucet while brushing one’s teeth. Moreover, if the yard is lacking trees, it is good for the environment to plant a few. They also help lowering house temperatures during summer by blocking sun rays from heating the rooms. When cooking small meals, it is advisable to use small appliances.

Instead of driving cars to work, use public transportation. It will save time and money. If you want to reduce carbon footprint, buy recycled products. The labels will tell if the carton is recyclable.

Other Environment and Energy Conservation Tips

  • Use less toxic furnishings that may contain phthalate, volatile organic compounds (VOC), polybrominated diphenyl ethers, formaldehyde and other compounds that can cause serious health issues like lung damage, nausea, urinary dysfunction and others;
  • Use more energy efficient lighting that reduces computer glare;
  • Incorporate indoor plants to improve air quality and stop using air fresheners;
  • Install proper ventilation systems;
  • Use less fertilizer for landscaping;
  • Maintain appliances on a regular basis for better usage of energy;
  • Use less plastic;
  • Use high wattage bulbs;

Benefits of Going Green

Going green is the way to contribute to sustaining the environment and the planet’s longevity. A green building is environmentally safe and uses less power. It will make the surroundings healthier to live in and be less disruptive to plants and wildlife. The benefits of going green are economic, environmental, and social.

  • Economic

It will cut down on costs by saving on gas and electricity when using alternative means producing power (solar panels, wind turbines). These upgrades will also increase the resale value of one’s property.

  • Environmental

Individuals can save water by installing toilets that flush more efficiently by using less water. The use of sustainable materials would be useful in reducing garbage accumulation, and it will help to prevent pollution. Emitting less harmful gasses will save the trees. Better air and water quality will reduce illnesses and safeguard the ecosystem.

  • Social

The quality of life will be better overall. A healthier surrounding will reduce natural disasters like heat waves, floods, and droughts.

The government has provided incentives to encourage homeowners to preserve the environment by issuing the 45L tax credit. Such incentives will lower the tax burden and save money in the long run.

Properties Eligible for the 45L tax credit

The 45L tax credit requires the energy efficiency of the building to be higher than the national standard. The buildings must be three stories or lower, like an apartment, condo, townhouse, or single family home. They must have energy efficient features like high R-Value insulation and roofing, insulated windows, doors, and or HVAC systems.

Requirement for Tax Credit

To qualify for the 45L tax credit, the person must own the residence. A person could be an individual, a trust, an estate, partnership, an association, or a corporation. Additionally, the energy consumption of the dwelling has to be analyzed to prove that the building has met the energy standard per the requirements of Code 45L (c).

Qualification for Contractors

An eligible contractor who has built a green building residence between August 8, 2005, and December 31, 2016, can also qualify for the tax credit. First, the contractor has to get a certification from an eligible personnel authorized by the Residential Energy Services Network (RESNET) or a similar rating network.

The certifier does the testing onsite with a computer model. The certifying agent will provide a certification package. It will state that the expert doing the certification believes (under penalties of perjury) that the information provided is factually correct and complete. There is a fee charged for the service per unit.

The tax credit values $2,000 per residence. Newly built homes will meet the energy standard because contractors are doing their best to benefit from the incentive provided via the 45L tax credit. The credit applies within the year the contractor leases or sells the building.

Going green benefits everyone and the environment. It reduces waste consumption and improves the overall quality of life. It is also better for the ecosystem. Families will save on gas and electricity by using alternative means of energy. They will also increase their property value with the energy efficient upgrades. Contact Walker Reid Strategies and our experts will help you get your building certified and benefit from the 45L tax credit.