Tax

Extending major tax incentives for energy-efficiency construction used to be an annual rite of passage for Congress. Incentives such as Section 45L (a $2,000 tax credit for builders of energy-efficient homes) and Section 25C (a $500 tax credit for energy-efficient improvements) were frequently bundled and renewed with bigger tax issues such as Medicare reimbursement, the alternative minimum tax, or the research and development tax credit. But movement on these programs has been quiet since early last year, when they were retroactively extended through 2017.

In October, however, a coalition of businesses, trade associations, and advocacy groups called on Congress to quickly pass the bipartisan Home Energy Savings Act and New Home Energy Efficiency Act, which would reform and reinstate some of those tax incentives.

Under the reformed 25C legislation, “homeowners could receive up to $1,200 in tax credits over their lifetime for installing home equipment and components that meet certain efficiency levels,” including water heaters, boilers, and furnaces, according to a report in PHCP Pros. “The 45L new home construction bill — named the New Home Energy Efficiency Act — would give homebuilders a $2,500 incentive for building high-efficiency new homes.”

The $2,500 tax credit could bring a renewed focus on energy efficiency for builders, leading them to market their green technologies more aggressively. Remodelers may also rekindle their efforts to educate customers on the benefits of energy-efficiency improvements such as new appliances or upgraded heating systems.

While high-efficiency, propane-fueled products such as condensing boilers, furnaces, and tankless water heaters would help building pros and their customers qualify for these incentives, using these systems can also help builders qualify for existing rebates and incentives from their local utility or propane provider. The Propane Construction Incentive Program, for instance, provides up to $1,500 per home for builders constructing new homes with propane space-heating, water-heating, and other technologies.

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