STRUCTURAL INSULATED PANELS - SIPs TAX CREDITS & INCENTIVES

Does Building With Structural Insulated Panels - SIPs Qualify For Any Tax Credits?

Yes! Energy-efficient improvements can lower your taxes!

Energy efficiency measures applied during construction of a new or the renovation of existing homes, residential or commercial buildings can add up to savings by taking advantage of federal, state, local tax credits and utility incentives. Although these tax credits are available for a variety of energy saving measures, insulating the building envelope continues to be a primary measure with considerable benefits.

Are RAY-CORE's insulated wall panels and roof panels a fit?

RAY-CORE Structural Insulated Panels -SIPs are a perfect fit for meeting the criteria specified in these credits and incentives. The high R-value of our insulated wall panels and roof panels meet or far exceed the energy efficiency requirements specified in the majority of these incentives. A tax credit can provide significant savings, directly reducing the tax you will pay. And tax savings is only the beginning! A lifetime of reduced heating and cooling costs will pay you month after month for the lifetime of the home. Before you build, consider what improvements you can make to save you money on your taxes now and utility costs in your future.

 

Homeowner Tax Credits for Existing Homes

Is there a tax credit for existing homes?

FEDERAL TAX CREDITS

Tax credits may be available to taxpayers who make energy-saving or energy-efficient home improvements pertaining to the home envelope through the federal government’s Non-Business Energy Property Credit. Due to expire after 2014, and extended by the Consolidated Appropriations Act, this tax credit is now available through December 31, 2016. To claim this energy credit, the homeowner must have purchased qualified energy efficiency improvements on an existing home located within the United States that is the taxpayer's principal residence, and placed them into service, i.e. made them ready and available for use, in 2016, or retroactively in 2015.  A “qualified energy efficiency improvement” means any energy efficient building material or component that meets the technical efficiency standards set by the Department of Energy and fall under one of the qualifying building envelope components referenced by the plan. Costs associated with the installation of the materials or components do not qualify for the credit. Taxpayers can claim the tax credit, up to 10% of cost of the qualified energy efficiency improvements, up to a maximum lifetime limit of $500.00.

* Note that these energy incentives have changed as of February 17, 2009. If you installed home envelope components between January 1 and February 16, 2009, please click here.

What is eligible for the federal tax credits?

Non-Business Energy Property Credit Qualified Energy Efficiency Improvements:

• Any insulation material or system which is specifically and primarily designed to reduce the heat loss or gain of the taxpayer's primary residence, when installed in or on the structure
• Replacement windows and skylights, and exterior doors
• Any metal or asphalt roof installed with appropriate pigmented coatings or cooling granules meeting Energy Star requirements, which are specifically and primarily designed to reduce the heat gain of the taxpayer's residence
• Other modifications: i.e. window films certified by the manufacturer that the product meets the requirements of a "qualifying insulation system. Sealing cracks in the building shell and ducts to reduce infiltration and heat loss, consistent with the 2015 IECC.

Qualified heating, cooling and water-heating equipment also may be eligible for a tax credit.

Click here to access federal guidelines regarding qualifying energy-efficient property.

What do I need to do to qualify for the incentives?

Under the IRS rules for the Non-Business Energy Property Credit, manufacturers need to certify that specific measures are eligible. Homeowners should obtain a copy of this certification from the manufacturer, installer or retailer when buying these products. Certifications need not be submitted to the IRS, but should be kept on file in case the IRS has questions. Homeowners should also make notes on when each eligible measure is installed- only measures "placed in service".

RAY-CORE, Inc. Manufacturer's Certification Statement

This credit can be claimed by filing Form 5696, Residential Energy Credits with your federal tax return.

State and Local Tax Credits?

Additional federal, state, and local-level incentives may be available:

U.S. Department of Energy Tax Credits, Rebates and Savings - Can filter by state, eligibility and savings category
The Database of State Incentives for Renewables & Efficiency (DSIRE) is a comprehensive source of information on state, local, utility, and federal incentives and policies that promote renewable energy and energy efficiency.

Where can I find out more about saving money?

Insulation:

U.S. Department of Energy - Energy.gov - Insulation
North American Insulation Manufacturers Association (NAIMA) - Insulation

Windows:

U.S. Department of Energy Savers - Energy.gov - Windows
American Council for an Energy-Efficient Economy - Windows
Efficient Windows.org
National Fenestration Rating Council - Windows
International Window Film Association

Other:

U.S. Department of Energy Savers - Energy.gov - Air Sealing
Residential Energy Services Network (RESNET)
Energy Star - Duct Sealing
Energy Star - Air Sealing
Energy Star - Roof Products


Builder Tax Credits for New Homes

Who can be eligible for the federal tax credit?

The Energy Efficient Home Credit - 45L is and often overlooked federal incentive, and is a source of potential extra benefits for affordable housing developers and investors. Available through 2016 to builders and developers who build energy-efficient homes, both site-built and manufactured, including multi-family units and apartments..

What is the tax credit for new homes?

FEDERAL TAX CREDITS

The federal Energy Policy Act of 2005 established tax credits up to $2,000.00 per dwelling unit, available to home builders for new energy-efficient homes that provide a level of heating and cooling energy consumption that is significantly less than certain national energy standards. Although this tax credit has been extended numerous times, currently it is set to expire at the end of 2016. This $2,000.00 per dwelling unit credit also applies to contractors of manufactured homes meeting the same energy efficiency requirements and conforming to the Federal Manufactured Home Construction and Safety Standards. For contractors of Manufactured Homes achieving the lesser standard of energy savings or meeting Energy Star requirements may qualify for a $1,000.00 per dwelling unit tax credit.

What Qualifies?

• Residential, single-family dwellings.
• Residential, multi-family, three stories or less above grade.
• Residential, apartments, three stories or less above grade.
• Residential manufactured homes.

How do I qualify for the incentive?

• The home(s) must be located in the United States,
• The homes(s) must be substantially completed, sold or leased to another person for use as a residence before December 31, 2016,
• The home(s) must meet the energy efficiency requirements outlined in the stature,
• You must be an eligible contractor who owns or has a basis in the qualified energy efficient home during its construction, or in the case of a manufactured home, the manufactured home producer of the home, and
• Certification must be obtained by the eligible contractor from an eligible certifier before the energy efficient home credit can be claimed. An eligible certifier is a person not related to the eligible contractor who conducts computer modeling and on-sight testing and prepares a certification model for the home. This person must be authorized or accredited by the Residential Energy Services Network (RESNET), or an equivalent rating network.

Standards for Calculating Energy Savings for New Energy Efficient Home Credit - 45L, IRS Announcement 2006-88

What are the energy saving requirements?

Site-built homes:

Builders can take a credit of $2,000.00 per home, in the year that that the home is sold, if:
• The home is certified to use at least 50% less energy annually than a comparable home that complies with the standards provided in chapter 4 of the 2006 International Energy Conservation Code (IECC), including supplements, and
• Heating and cooling equipment efficiencies correspond to the minimum allowed under the regulations established by the Department of Energy pursuant to the National Appliance Energy Conservation Act of 1987.
• The building envelope component improvements account for at least 1/5 of the 50% energy savings.

The IRS provides guidance regarding site-built homes for certification of the Energy Efficient Home Credit in IRS Notice 2006-27.

Manufactured homes:

Producers can take a credit of $2,000.00 per home, in the year that that the home is sold, if:
• The home is certified to use at least 50% less energy annually than a comparable home that complies with the standards provided in chapter 4 of the 2006 International Energy Conservation Code (IECC), including supplements, or
• Conforms to Federal Manufactured Home Construction and Safety Standards (part 3280 of title 24, Code of Federal Regulations), and
• Also, the building envelope component improvements account for at least 1/5 of the 50% energy savings.

Producers can take a credit of $1,000.00 per home, in the year that that the home is sold, if:
• The home is certified to use at least 30% less energy annually than a comparable home that complies with the standards provided in chapter 4 of the 2006 International Energy Conservation Code (IECC), including supplements, or
• Meets the requirements established by the Administrator of the Environmental Protection Agency under the Energy Star Labeled Homes program, and
• Also, the building envelope component improvements account for at least 1/3 of the 30% energy savings.

The IRS provides guidance regarding manufactured homes for certification of the Energy Efficient Home Credit in IRS Notice 2006-28.

DOE is now preparing guidelines on suggested design and construction techniques for reaching the 50% savings threshold. These should be available soon at U.S. Department of Energy website.

This credit can be claimed by filing Form 8908, Energy Efficient Home Credit with your federal tax return.

Where can I find out more about qualifying homes?

Tax Compliance Software and RESNET:

• National Registry of Accredited Tax Credit Compliance Software Tools
• Standards for Calculating Energy Savings for New Energy Efficient Home Credit - 45L, IRS Announcement 2006-88

• RESNET Presentation: Procedures for Certifying Residential Energy Efficiency Tax Credits for New Homes (114 KB PDF) * This does not represent any official government or TIAP member positions.
• RESNET Presentation: The New Homes Credit (858 KB PDF)

Accredited Rating Providers from Residential Energy Services Network (RESNET)

Commercial Buildings Tax Deduction

Who can be eligible for the federal tax credit?

The Energy Efficient Commercial Building Deduction - 179D established in the Energy Policy Act of 2005 has been extended several times, and now is set to expire at the end of 2016.

What is the tax credit for commercial buildings?

FEDERAL TAX CREDITS

The federal Energy Policy Act of 2005 established tax credits for expenditures made by owners or tenants to make new or renovated commercial buildings more energy efficient, and to designers of qualifying government buildings. A significant Federal one-time tax depreciation deduction of up to $1.80 per square foot is available to qualified improvements in interior lighting, building envelope systems, and HVAC and hot water systems.

What qualifies?

• Reduction of energy costs associated with lighting system.
• Reduction of energy costs associated with the building envelope.
• Reduction of energy costs associated with the heating, cooling and water heating equipment.

How do I qualify for the incentive?

• The commercial building(s) must be located in the United States,
• The commercial building's energy efficiency improvements must be substantially completed before December 31, 2016,
• The commercial building's energy efficiency improvements must be made meeting requirements outlined in the stature,
• Certification must be obtained through the use of the 179D DOE Calculator, a tool that provides calculations to determine eligibility for the 179D federal tax deduction as a substitute for other modeling software or other Qualified Software per IRS requirements.

What are the energy saving requirements?

Level 1:

Owners or Designers of new or existing commercial buildings: eligible for a $1.80 per square foot tax deduction:
• Buildings that save 50% or more of projected annual energy costs across all three system components, i.e. lighting system, building envelope, and heating, cooling and water heating equipment.

Level 2:

Owners or Designers of new or existing commercial buildings: eligible for a partial tax deduction of $0.60 per square foot:
• Buildings that save a percentage of projected annual energy costs for one of the three system components - lighting (25%), building envelope (10% energy savings), and heating, cooling and water heating equipment (15%).

The IRS provides guidance manufactured homes for certification of the Energy Efficient Home Credit in IRS Notice 2006-52 and IRS Notice 2008-40.

 

Energy Codes

• For more information on energy codes, visit the ICC Store, or The Green Destination: Essential Information for Green Building.