How the 25E Performance Tax Credit Can Help the Industry
It’s no surprise government tax credits for residential energy efficiency upgrades are a boost to the home renovation industry. The recent federal tax credit for windows and doors, where homeowners could claim a portion of their purchase of energy-efficient windows, doors and skylights, coupled with the trend for homeowners to stay put and fix up their current residence due to a lagging housing market, helped consumers feel more confident to invest in their homes again.
Even now as 2012 comes to a close, consumer confidence continues to be marred by the stinging memory of 2008, and homeowners are looking to get the most bang for their buck when it comes to home improvement projects. The promised return on investment of lower utility bills and increased resale value that accompanies popular energy efficient upgrades instantly puts these projects at the top of a homeowner’s priority list.
Currently part of a number of bills before Congress, the 25E Residential Performance Tax Credit would be revolutionary because it wouldl be the first time the effectiveness of energy efficient home improvements can be measured. To qualify for the credit, taxpayers must enlist a Building Performance Institute-accredited company or a Residential Energy Network (RESNET) certified Energy Smart Home Performance Team to establish the baseline energy use of the home.
After an energy-efficiency plan is in place to give the home an airtight seal to reduce energy purging, the home’s energy use will be measured again and compared to the initial baseline measurement. The ensuing tax credit will then be based on the percentage that energy use from heating, cooling and hot water is reduced, up to $5,000 or 30 percent of the total job cost for the installed measures.
With the full implementation of 25E, homeowners will see the drastic impact of energy efficient upgrades in black and white for the first time. Instead of deciding to embark on green projects solely based on a hope that utility bills will be lowered or a feeling of being environmentally conscious, we’ll have concrete, undisputable proof of the effectiveness of these projects in achieving energy efficiency in the home. This evidence acts as a revolutionary proof point for our business as we look to the future of the home improvement industry.
Government policy is at the forefront of daily conversation across the country as we’re a few short weeks from the presidential election, so let’s reinvigorate the conversation around this and other tax credits and policies that can help boost our industry. How do you see the 25E Performance Tax Credit helping the industry?