Although it may be good for the environment, it seems that few are willing to “go green” if there are cheaper alternatives. The well-known benefits of going green include environmentally friendly construction features, natural light, energy and water efficiency, conservation of renewable resources, lower greenhouse gas emissions, fewer toxic materials, and better air quality. Although such features result in less expensive operating costs, up-front construction and renovation costs can be substantially higher, overshadowing the long-term savings resulting from green building renovations such as long term energy savings over the life of a building. Higher construction costs have been cited as the most significant obstacle to green building efforts, followed by lack of political support and incentives, inability to justify capital expenditures when savings come from other budget line items, lack of market demand, affordability, and lack of public awareness.
It is apparent that energy savings, the environment and health issues alone are not bringing selling power or value to a green building and there remain challenges in bringing about a higher adoption rate of green building renovation practices. One way to encourage green building renovation may be through financial incentives and providing property owners with some “green” back in their pockets. This may be achieved by taking advantage of a tax policy which allows property owners to recoup certain costs incurred in green building construction and renovation costs. Recognizing the importance of green construction and renovations on the environment and the economy, the Internal Revenue Service may offer tax credits to those who choose to be environmentally conscience. Some example of green improvements than can result in tax credits are:
- Energy Efficient Windows and Doors
- Energy Star Appliances
- Geothermal Heating or Air Source Heat Pumps
- Gas, Oil or Propane Water Heaters
- Greener HVAC Systems, including Biodirectional Thermostats
- Solar Panels
- Energy Efficient Insulation, Weather Stripping and Air Sealing Methods
- Energy Star Rated Roof
In order to take advantage of the tax credits, it may be required that energy savings be documented by a licensed engineer who issues a certificate that is filed with tax returns. The IRS provides specified tax credits which depend on the type of energy saving devices which are installed. In addition to federal tax benefits, there may also be individual state green building incentives available. Documented tax benefits have ranged from $0.60 to $1.80 per square foot. IRS requirements for green tax credits for individuals and businesses are different and change often, and, thus, it is important to check the official IRS requirements for the most up-to-date information on the eligibility for green building renovation tax credits.
In addition to the social factors of promoting greater health and well-being, encouraging sustainable business practices, environmental reasons, and long-term benefits, perhaps immediate tax credits will have a greater effect on promoting going green, getting smart and staying healthy.