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Federal Tax Credit for Energy Efficient Homes Future is Bleak

Mar 16, 2017

The $2,000 federal tax credit for builders who build and sell energy efficient homes (45L) expired on December 31, 2016.  In the previous Congress there was no introduction of legislation to extend the credit.

The future of the credit is problematic.  There has been no movement in the 115th Congress to extend either the 45L credit or the tax credit for energy improvements of existing homes.  Energy efficient builders or HERS® Raters should not plan on the credit in the future.

There is some hope, however, in the future.  RESNET is working with such strategic allies as the Leading Builders of America and the Natural Resources Defense Council in crafting a new tax credit for energy efficient homes based upon the 2015 International Energy Conservation Code’s (IECC) Energy Rating Index.

The purpose of the new proposed credit is to establish self-correcting performance targets that builders could depend upon.  The proposed new credit would be triggered by the 2015 IECC’s Energy Rating Index Scores.  The credit would be for $3,000.  The target scores would be made more stringent as the market responds to the scores.

The language of the legislation is still being worked on and no legislation has been introduced in either house of Congress.  RESNET, however, has been working with potential sponsors in the Senate.

RESNET will inform its network when such legislation is introduced.