Transcript EPA’s Energy Star New Homes Program

RESNET
New Homes Tax Credit
TIAP Webinar
Steve Baden - RESNET
www.resnet.us
RESNET
Federal Tax Credit for New Homes
Site Built Homes
$2,000 to builder for each home whose
performance is calculated to exceed Heating
and Cooling Use of Section 404 of 2004
Supplement of the IECC by 50% (Does not count
water heating/renewable energy production –
covered by other incentives)
RESNET
Federal Tax Credit for New Homes
Effective Dates
Homes built after August 2005 and purchased
between January 1, 2006 and January 1, 2008
RESNET
Federal Tax Credit for New Homes
IRS Rule – IRS 2006-27
+
3rd Party Inspection Required –
Certified by RESNET or Equivalent
Rating Certification Organization
+
Software Tool Must Comply with
RESNET Software Test Specifications
RESNET
www.resnet.us/standards/tax_credits/procedures
RESNET
RESNET Federal Tax Credit
Software Specifications
+
Auto-Generation of the Reference
Homes (2004 Supplement to IECC)
+
HERS BESTEST
+
RESNET HVAC Tests
+
Duct Distribution System Efficiencies
Tests
RESNET
Federal Tax Credit Software Tools
Accredited by RESNET
+
Energy Gauge USA (Florida Solar
Energy Center)
+
Micropas (Enercomp, Inc.)
+
REM/Rate (Architectural Energy
Corporation)
+
Builder Energy Solutions (ICF
Resources)
RESNET
RESNET Federal Tax Credit
Inspection Specifications
+
Homes Shall be Independently Field
Tested
+
Field Verification Shall Follow
RESNET’s Home Energy Rating
Procedures
+
Person Who Certify Home’s
Qualification for Tax Credit Shall be
Trained and Certified in Accordance
with RESNET’s National Home Energy
Rating Procedures
Tax Incentives for
Home HVAC
Equipment and
Appliances
Presented at Tax Incentives Assistance Project Webinar
21 July 2006
David B. Goldstein, Ph.D.
Natural Resources Defense Council
San Francisco
[email protected]
Goals of the Tax Incentives

Make highest efficiency products
available to everyone


Attract market attention with multi-year
incentives
Harmonize with existing programs
Consortium for Energy Efficiency
(CEE)
 Energy Star

HVAC Program Status

Original intent was a 4-5 year program

Manufacturers have indicated that this is the time
needed to justify major investments in production
capacity for high-efficiency equipment

EPAct Incentives were trimmed to 2 years
(2006-2007)

Snow/Feinstein Bill, S. 3628 extends the
program to 5 years (adds 2008-2010)
How Do You Qualify?

Manufacturer certifies eligibility

Online resources show product availability:
www.energytaxincentives.org
 www.cee1.org/resid/rs-ac/rs-acmain.php3
 www.gamanet.org/gama/inforesources
.nsf/vContentEntries/Product+Directori
es?OpenDocument
 www.energystar.gov/index.cfm?c=prod
ucts.pr_tax_credits#1


Limited to taxpayer’s principal residence
Qualifying Levels of
Efficiency I
Energy Efficiency
Measure
Furnace fans
Minimum Efficiency
Requirement
Electric use no more than
2% of energy use of
furnace
Tax Credit
$50
Natural gas, propane or 95 AFUE
oil furnace or hot water
boiler
$150
Natural gas, propane or 0.80 Energy Factor
oil water heater
$300
Qualifying Levels of
Efficiency II
Energy Efficiency
Measure
Minimum Efficiency
Requirement
Tax Credit
Electric heat pump
water heater
2.0 energy factor
$300
Electric heat pump
HSPF 9, SEER 15, EER
13
$300
Central air conditioners
CEE Tier 2
(SEER 15/EER 12.5 for
split units, SEER 14/EER
12 for single-packaged)
$300
Geothermal heat pump
EnergyStar
$300
Product Availability

The goal of multi-year incentives is to
increase availability and demand
dramatically

This is beginning to work:


Air conditioners: thousands of products
are now available compared to about 5 in
2004
Furnaces: about 100 qualifying products
are available
Appliances

A manufacturer credit: consumers don’t see
the money

Likely to lead to more products and greater
availability at CEE and Energy Star levels

Eligible products can be found at :
http://www.energystar.gov/index.cfm?fuseactio
n=find_a_product.
Qualifying Products

Refrigerators: Incentives for Energy
Star and CEE Tier 1 and Tier 2
products (15%, 20% and 25% below
federal standards)

Clothes washers: 2007 Energy Star
level (1.72 MEF, 8.0 WF)

Dishwashers: 2007 Energy Star level
(.65 EF)
Solar - Residential and Commercial ITC
Colin Murchie, Director of Government Affairs
Solar Energy Industries Association
(202) 682 0556 x 2
[email protected]
www.seia.org
Solar - Residential and Commercial ITC
• 30% Credit on Capital Costs through 2007
– 26 USC 48
– Permanent 10% Commercial ITC
• For solar water heating, air heating, lighting,
PV
• Includes equipment and installation
• 5 – year carryforward
www.seia.org
Credit Limitations and Requirements
• Pool Heating Equipment Ineligible
• $2,000 cap for residential systems
• SRCC (www.solar-rating.org) or state certification of
heating equipment
• AMT ineligible
– AMT eligibility effort underway – www.seia.org
• Non-transferable
– Sale – leasebacks permitted, ownership required
www.seia.org
Additional Resources
• www.findsolar.com
– Contractors, reviews,
recommendations, etc.
• www.dsireusa.org
– All state incentives
• www.seia.org
– Credit extension effort
– Tax Manual
• continuous updates
• IRS precedent
www.seia.org
FLORIDA SOLAR ENERGY CENTER
A Research Institute of the University of Central Florida
Qualifying for the
New Home Tax Credit
Examples in 9 U.S. Cities
TIAP Web Seminar
July 21, 2006
Philip Fairey
Introduction





Simulations and calculations performed using
EnergyGauge® USA – qualified through
software tests required by RESNET Pub 005-01
Only one of many possible solutions provided
for each climate (best orientation)
No mechanical ventilation – all homes with
natural infiltration at 0.35 ach
All insulation is assumed installation Grade I
Results indicate that many new homes, in all
parts of the country, may ultimately qualify for
federal tax credits.
Home Characteristics
City
Area
Home Description
Miami
2,000
1-story, block, slab-on-grade
Houston
2,000
1-story, frame, slab-on-grade
Dallas
2,400
2-story, frame, slab-on-grade
Atlanta
2,400
2-story, frame, on crawl space
Las Vegas
2,000
1-story, frame, slab-on-grade
Long Beach*
2,400
2-story, frame, slab-on-grade
Sacramento*
2,400
2-story, frame, slab-on-grade
Baltimore
2,000
1-story, frame, on crawl space
Burlington
2,400
2-story, frame, w/cond. basement
* Very similar to examples provided by Micropas
Envelope Characteristics
City
Floor
Roof
Ceiling
Walls
Miami
R-0
Tile*, RBS
R-30
R-7.6
Houston
R-0
Comp, RBS
R-32
R-13
Dallas
R-0
Comp, RBS
R-32
R-13
Atlanta
R-30
Comp, RBS
R-38
R-11+3
Las Vegas
R-0
Comp, RBS
R-32
R-13
Long Beach
R-0
Comp, RBS
R-30
R-13
Sacramento
R-0
Comp, RBS
R-30
R-13
Baltimore
R-32
Comp
R-48
R-13+5
Burlington
R-0
Comp
R-48
R-19, 19+3
* Light in color
Window Characteristics
City
Type
Frame
WFA%
U-Fact
SHGC
Miami
Low-e
Metal
18
0.57
0.28
Houston
Low-e
Metal
18
0.57
0.28
Dallas
Low-e
Vinyl
18
0.47
0.40
Atlanta
Low-e
Vinyl
18
0.47
0.40
Las Vegas
Low-e
Vinyl
18
0.47
0.40
Long Beach
Low-e
Vinyl
16.5 *
0.47
0.40
Sacramento
Low-e
Vinyl
16.5 *
0.47
0.45
Baltimore
Low-e
Vinyl
18
0.47
0.55
Burlington
Low-e
Vinyl
18
0.33
0.55
* To follow Micropas example
Lighting & Appliances
City
Fl_lights*
Frig
dWash
cFans
Miami
22/32
eStar
eStar
eStar
Houston
20/32
eStar
eStar
---
Dallas
20/32
eStar
eStar
---
Atlanta
std
std
std
---
20/32
eStar
eStar
---
Long Beach
std
std
std
---
Sacramento
std
std
std
---
Baltimore
std
std
std
---
Burlington
std
std
std
---
Las Vegas
* high-efficiency fixtures / qualifying fixture locations
HVAC Equipment
City
Ducts
Heating
Cooling
Miami
Interior, tight*
COP 1
SEER 15
Houston
Interior, tight*
HSPF 8.0
SEER 14
Dallas
Interior, tight*
HSPF 8.0
SEER 14
Atlanta
Interior, tight*
HSPF 8.0
SEER 14
Las Vegas
Interior, tight*
HSPF 7.8
SEER 14.5
Long Beach
R-6 attic, tight*
AFUE 80
SEER 13
Sacramento
R-6 attic, tight*
AFUE 92
SEER 13
Baltimore
Interior, tight*
AFUE 94
SEER 13
Burlington
Interior, tight*
AFUE 94
SEER 13
* tight = tested to 3 cfm 25,out per 100 ft2 conditioned area
Conclusions





Qualification not difficult in very mild climates
Window selection is important, with changes in
SHGC making a significant difference, even in
northern climates
Efficient lighting and appliances provide
significant benefit in cooling dominated climates
Relatively “standard” envelope features can
make the goal with only “moderate” increases in
HVAC efficiencies if ducts are good
Tight ducts located in conditioned space provide
significant benefit for both heating and cooling.
Tax Credit Software



Software providing for analysis for tax credit
qualification available to anyone
Software for “certification” purposes is only
available to IRS “certifiers”
‘Try before You Buy’ Software is available
online as a free downloadable at
http://EnergyGauge.com
Integrating Tax Incentives into
Energy Efficiency Programs
Rick Gerardi
Director, Residential Programs
NYSERDA
New Homes
• Planning on a “Better-Best” Strategy
• “Better” = New York ENERGY STAR® Labeled Homes –
core voluntary program
- Continued training and technical assistance to builders
- NY Incentives of $750- $1000 per home
- 13% market share
• “ENERGY STAR Best of the Best” = tax credit-eligible homes and fulfill
NYS requirements with additional specs
- Additional training and technical assistance to builders and Raters
- Combination of NY incentives and tax credit built into software
- Targeted mid-stream marketing
Existing Homes
• Home Performance with ENERGY STAR®
– Program which promotes comprehensive retrofits to address
comfort, health, safety and energy
– Typically achieving 30% energy savings
– $500 federal tax incentive a modest sweetener
• We will tell homeowners about
• Not a major part of promotion
• A performance-based incentive with higher incentives
for high savings will better complement our program
– E.g. as in the new Snowe-Feinstein bill
– Software documentation of energy percentage savings
ENERGY STAR® Labeled Products
• Planning a “best of the best”
campaign to promote high-efficiency
appliances and other products which
exceed Energy Star criteria
- Will better align with tax credit eligibility
• In 2007,
Energy Star and tax credits will align for
in 2006
clothes washers and dishwashers but not refrigerators
- “Best of the best” will still be important for levels above
ENERGY STAR
Moving Forward
• Tax incentive levels and structure should be
reexamined as part of extension discussions
– Restructuring particularly needed for existing homes
• ENERGY STAR should keep its specifications upto-date
– E.g. refrigerator specification needs updating
• “ENERGY STAR Best of the Best” to increase
specification levels when a state exceeds its
ENERGY STAR market transformation goals
• NY will continue fine-tuning programs to
80 years of excellence
Commercial Buildings Tax Deduction
Ed Gray
Director, Energy Infrastructure
National Electrical Manufacturers Association
80 years of excellence
Commercial Buildings Tax Deduction
Provides for energy efficient systems deduction up to $1.80 per square foot
for whole buildings using 50% less energy on a cost basis than a building
designed to ASHRAE/IESNA 90.1-2001, as of April 2001. Or $0.60 per
square foot for systems improvements proportional to 50% energy
savings for a whole building. Systems include lighting, HVAC/water
heating, and building envelope. There is a special provision for federal,
state or local government owned buildings
• Asset owner gets the deduction
• Allowable for assets placed in service from 1/1/06 through
12/31/07
• For government buildings, the person primarily responsible for the
design gets the deduction
• Lighting systems have an interim provision, so that design doesn’t
have to wait on IRS regulations
• Certified designers, software, and inspectors must be used
80 years of excellence
Tax Rule Schedule
IRS Notice 2006-52 includes self certification
concept for design, software, inspection; forms
showing technical basis to be retained by taxpayer,
but not sent in with return
Government buildings rules to be included in
another Notice
“Regulation” to be done later to include detailed
rules
“Certified” software likely to be available soon
Interim lighting rules enable work to be done before
regulations done
Stakeholders need to review IRS work for potential
comments
80 years of excellence
IRS Clarified Issues
International Revenue Service Notice 2006-52
contains guidance; corrected version in Internal
Revenue Bulletin 2006-26 dated June 26, 2006
Certifier and inspector may be professional engineer
or contractor licensed in the building’s jurisdiction
Software to be self-certified, to be listed on DOE
website
Inspector cannot be an employee of asset owner
80 years of excellence
Alternatives for Deduction
1.
2.
3.
4.
5.
Whole building 50% energy cost reduction
Partial Deduction – Lighting Target
Partial Deduction – HVAC Target
Partial Deduction – Envelope Target
Interim Lighting Rules* using ASHRAE prescriptive
lighting tables (9.3.1.1 and 9.3.1.2)
*Interim Lighting Rules only in effect until final
regulations are published in Federal Register,
NEMA has requested that “interim” rule alternative
be made permanent
80 years of excellence
Whole Buildings
Reference Building meets Standard 90.1 minimum
requirements in the manner specified
Performance Rating Method (PRM) used to determine
energy and power cost reduction percentage of
proposed building compared to reference building
(50% and 16.7% targets)
Baseline reference building performance uses PRM in
Appendix G of ASHRAE Standard 90.1-2004
California Title 24 “ACM” requirements:
 Internal loads (Tables N2-2 and N2-3)
 Infiltration modeling (Section 2.4.1.6)
 Luminaire power from Appendix NB (or manufacturers data)
80 years of excellence
50% Below 90.1-2001 Buildings
Achieved for a small number of existing
buildings
Additional systems in the Technical
Explanation of the legislation are not in the
IRS guidance (renewable on-site generation,
daylighting, efficient wiring, and others)
A high degree of systems integration; and
careful site selection and orientation needed
80 years of excellence
Typical Design Features
Efficient envelope systems
High performance glazing and selective
orientation with solar control
Daylighting
High efficiency lighting and controls
High efficiency HVAC and controls
Ventilation control and heat recovery
80 years of excellence
PRM Information
ASHRAE Standard 90.1-2004 (on-line, read-only)
2005 California Title 24 Nonresidential Alternative
Calculation Method (ACM) Approval Manual
http://www.energy.ca.gov/title24/2005standards/non
residential_acm/index.html
DOE list of approved software
http://www.eere.energy.gov/buildings/info/tax_credit
_2006.html
NREL “Energy Savings Modeling and Inspection
Guidelines for Commercial Building Federal Tax
Deductions”
80 years of excellence
EPAct 2005 System Deduction
Provides for partial deduction for 3 major systems
(lighting, HVAC/water heating, building envelope) that
correspond to 50% reduction in building energy use
IRS Notice 2006-52 states that 16.7% whole building
savings are the system goal for each system
Requires building modeling using certified software
Software will be listed on a DOE website
NEMA has commented that the reference building,
from a lighting perspective, need only be based on
the space use, LPD and square feet; it is not
necessary to develop site specific references for
lighting
80 years of excellence
System Deduction
Straight One-Third Allocation
33%
34%
Lighting
Mechanical
Envelope
33%
Strip Mall Example
22%
28%
Lighting
Mechanical
Envelope
50%
IRS decision of 1/3 split
means 16.7% energy cost
reduction for each system
(1/3 of 50%)
Retail example using “custom
targets”:
 Envelope: 22% of cost; 11%
savings target
 Lighting: 28% of cost; 14%
savings target
 Mechanical: 50% of cost;
25% savings target
One-third split targets may be
hard to meet
80 years of excellence
Interim Lighting Provision
Until such time that final IRS rules are promulgated, lighting systems
are eligible for a partial deduction.
Key provisions:
• Deduction is $0.30 to $0.60 for 25 to 40% under
ASHRAE LPDs, respectively, from Table 9.3.1.1
or 9.3.1.2. “Use it or lose it” allowances are not to
be considered in the LPD reduction
• Warehouses must be 50% under to get $0.60 (no
sliding scale)
• ASHRAE controls + “bi-level switching” required
• Industry has asked that provision be made
permanent as the lighting system deduction
80 years of excellence
Continuing Actions
Convene technical stakeholders group to
resolve details of ASHRAE vs. California
methods and reference building
Extend tax provision (several bills already
introduced in Congress)
Determine if other provisions need legislative
solutions
Continue promotional program
80 years of excellence
Further Information
http://www.efficientbuildings.org
http://www.lightingtaxdeduction.org
http://www.energytaxincentives.org/tiapcommercial-bldgs.html
http://www.advancedbuildings.net/
Vehicle Tax Incentives
TIAP Webcast
Therese Langer
ACEEE Transportation Program
July 21, 2006
Efficient vehicle incentives:
Light-duty
• Consumer tax credit of up to $3400 for
hybrids and diesels
• Based on fuel economy and lifetime fuel
savings of vehicle relative to average in
weight class
• Must meet threshold for emissions
• After a manufacturer sells 60,000
vehicles, credit amounts begin to
decline
Efficient vehicle credits:
heavy-duty
Improvement in city fuel
economy
Hybrid credit as percent of
qualified incremental cost
At least 30% and under 40%
20%
At least 40% and under 50%
30%
At least 50%
40%
Gross vehicle weight (GVW)
rating
Maximum qualified
incremental cost
8,501-14,000 pounds
$7,500
14,001-26,000 pounds
$15,000
> 26,000 pounds
$30,000
Status of market – light-duty
• Hybrids
–
–
–
–
11 eligible vehicles, gaining up to 93% of maximum credit
None available in certain classes (e.g. pickup)
Sales about ~ 1% of the market
One manufacturer has already hit 60,000-vehicle threshold,
no others will meet this year
• Diesels
– Not clean enough (yet)
– First one slated for release this year
• Fuel cell vehicles
– None commercially available
Light-duty hybrid sales
Calendar Year:
2003
2004
2005
2006 YTD
Cumulative
Honda Insight
1,168
583
666
489
13,653
Toyota Prius
24,627
53,991
108,077
48,156
276,088
Honda Civic Hybrid
-
25,571
25,774
15,755
67,100
Ford Escape Hybrid/Mariner Hybrid
-
2,993
15,719
11,996
30,708
Honda Accord Hybrid
-
1,061
16,826
3,245
21,132
Lexus RX 400h
-
-
20,661
11,193
31,854
Toyota Highlander Hybrid
-
-
17,954
18,109
36,063
Toyota Camry Hybrid
-
-
-
7,386
7,386
Lexus GS 450h
-
-
-
666
666
25,795
84,199
205,677
116,995
484,650
Total:
Status of market – heavy-duty
• Except for transit buses, all candidate
vehicles in pre-production stages
• Incentives could make a big difference
in the HD market, but
– Incentives may not be large enough
– Timing is not quite right
• Test procedures allowing vehicles to
gain credits still under development
Fleet issues
• For tax-paying entities: Alternative
Minimum Tax, sufficient tax liability
• For tax-exempt entities: seller gets the
credit but must divulge amount to buyer
– Will seller pass on credit?
– Can seller take advantage?
• Availability of credit information relative
to purchase cycle
Fleet issues (cont.)
• For heavy-duty, most purchasers will be
fleets and many, tax-exempt
• First hybrid applications identified:
transit buses, delivery trucks, waste
haulers, and utility trucks
• “Seller” will typically be the
manufacturer; how does this affect
efficacy of the credits?
Next steps
• Light-duty
– Find out how credits influence
manufacturer production plans and in
particular what limits domestic
manufacturers’ interest
– Improve fleet access to hybrids and test
mechanism to accommodate tax-exempt
purchasers and leasing
Next steps (cont.)
• Heavy-duty
– Expedite test procedure adoption to reduce
uncertainty re credit availability
– Resolve tax-exempt, AMT issues
– Extend credits?