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Energy Efficient Tax Credits for Insulation in Energy Bill

Who gets the tax credit - The builder of the home gets the tax credit for a new home.

How much is the tax credit - There is a maximum credit of $1000.00 if there is a reduction of energy consumption of 30%. There is a $2000.00 max if there is a reduction of energy consumption by 50%.

Qualifications - A dwelling unit located in the US of which the construction is substantially completed after January 1, 2006. This dwelling unit must be certified to have a level of annual heating and cooling energy consumption which is at least 30% below the annual level of heating and cooling energy consumption of a comparable dwelling unit constructed in accordance with the standards of chapter 4 of the 2000 International Energy Conservation Code, as reads on the date of the enactment of this section and have building envelope component improvements account for at least 1/3 of such 30% to qualify for the $1000.00 tax credit. A 50% savings with 1/5 of the percentage being attributed to building envelope component is needed to qualify for the $2000.00 tax credit.

What is included in the term "Building Envelope Component" - This term means any insulation material or system which is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on a dwelling. This also includes exterior windows and doors along with any metal roof that has appropriate pigmented coating that reduce heat gain of dwelling and meet the Energy Star program requirements.

How do you become certified - This shall be determined by the Secretary of Energy. Such guidance shall specify procedures and methods for calculating energy and cost savings. This certification shall be made in writing and specify in readily verifiable fashion the energy efficient Building Envelope Components (BEC) and their respective rated energy performance. Most likely a HERS rating of around 87-90.

How does this tax credit effect the basis of the dwelling - There will be a basis adjustment that is for any expenditure with respect to any property, the increase in the basis of such property which would (but for this section of law) result from such expenditure shall be reduced by the amount of the credit so determined.

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