Insulating Concrete Forms and Energy Tax Credits
July 21st, 2009 | From the Field
We field numerous questions everyday on the array of benefits by building an Insulating Concrete Form house or building. Besides the tangible benefits of the building owner- like the 50%- 80% energy savings, protection from natural disasters, etc -there are some other benefits to building green. There are a lot of misconceptions on the government’s ARRA program and how it applies to ICFs. We reference numerous documents and articles when responding to direct inquiries, also which has been determined by our Insulating Concrete Form Association and a lot has been written on it as well. aBlog will just highlight some key things we hear everyday and see if some of the confusion can be lifted. Feel free to stop me and ask questions.
There are different types of tax benefits for building green, including building with Insulating Concrete Forms. I’ll break them down for two sets of people: the owner (homeowner) and the builder. The key is to have a measurable green standard for your building, such as the Energy Star for Homes. Having that rating will open up the possibilities for discounts, rebates, and tax incentives.
- Reward Wall Systems can help your new home earn the ENERGY STAR rating by providing solid monolithic insulated concrete exterior walls that have a high steady state R-22 R-value, thermal mass that moderates the temperatures from the exterior and interior, and a virtually air tight wall that keeps hot and cold air from entering your home. Our insulating concrete form (ICF) walls will help contribute to significant reduction of heating and cooling loads leading to an energy efficient Energy Star home.
Builder: For an Energy Star rated home, the builder is eligible for $2,000 tax credit for building the home.
Homeowner: There isn’t a clear cut answer for the homeowner as some states will offer an incentive or tax credit for the homeowner, but generally there isn’t a large program in place to do so yet.
Also depending on where you live, look into your local utility company for programs to entice owners and builders to build green and more energy efficient buildings. It has been reported of rebates of $150- $1,500 to the homeowner and/or builder for hitting the energy savings requirement set in place by the utility company.
Trade associations also may have incentives to building green. An article from BuilderOnline.com states an example of the PCA giving $1,000 for one home and $20,000 for 10 homes built to a specific standard using concrete for your sustainable structure (Progressive Incentive Program).
Probably the most common question we receive is if insulating concrete forms can qualify for the energy tax credits from the American Recovery and Reinvestment Act.
Regretfully, the answer is no- for now. That primary focus is based on existing residential home with upgrades and additions to roofing and insulation, HVAC units, Geothermal Heat pumps, water heaters, photovoltaic (Solar power), wind turbines, and fuel cells. Those credits will be most common this year, filed under form 5695 with the IRS.
Now directly dealing with insulated concrete forms, there are some specifics we should pass along as there are benefits for owners and builders. Our ICFA was so kind to compile this info into a document for us, which we have published on our website. Feel free to read Energy Tax Provisions for ICFs in full, otherwise proceed reading for a super quick summary.
Residential contractors can earn a $2,000 tax credit for homes built to save 50% energy over code.
“Residential contractors may earn a federal tax credit of $2,000 for homes that reduce energy use for heating and cooling only (hot water excluded) by 50 percent compared to the stated national model energy code, the 2004 Supplement to the 2003 International Energy Conservation Code. A further stipulation is a minimum performance level for SEER-13 for air conditioners and heat pumps. Furthermore, improvements to the building envelope must account for at least 1/5 of such 50 percent, which is clearly achievable with ICF construction.”
Commercial property owners can earn a $1.80 / ft² tax deduction for a 50% energy cost reduction
“Business taxpayers (ie the building owner) can earn a deduction of $1.80 per square foot for commercial buildings that achieve a 50 percent reduction in annual energy costs, compared to a base building defined by the industry standard ASHRAE/IESNA 90.1-2001. Energy costs refer only to heating, cooling, lighting and water heating, since only these uses are within the control of the building designer.”
So this aspect of green building and tax credits etc is still in a development stage, as we would hope and expect that broader ranges of benefits will be able to be passed along to the owner and building of the superior building envelope.
Expect more on this topic in the near future as more benefits become available and be sure either as a builder or homeowner continue to do research on how building with Reward Insulating Concrete Forms can increase your bottom line.
The New Standard of Sustainability. Tell the World.
For more resources go to Energy Tax Incentives official Website
These tax credits are fantastic. They make systems like geothermal systems affordable for everyone to install.