Often there are local, state, or federal incentives in place to encourage developers to build or renovate high-performance green buildings. These can come in the form of utility rate reductions, utility incentives, tax credits, financing, or mortgage insurance rates. To make sure you’re getting the most value out of your project, our team is happy to help figure out what green construction incentives you are eligible for. Here are the four incentive categories we focus on:
* We are not tax professionals (surprise!) and this post does not constitute professional tax advice or guidance. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal, or accounting advice.
Green multifamily loans provide monetary incentives and discounts on interest rates for developers (borrowers) to build high-performing buildings that use significantly less energy than a code-built structure would. Anyone who is applying for a residential multifamily loan is eligible for a Green Multifamily Loan.
Different lenders offer a variety of financial incentives based on Green Building Certifications and smart property improvements. Here are a few common options:
Whether you have a property that is planning to or has achieved a green building certification, or a property you simply wish to improve the energy efficiency of, you have options. Fannie Mae offers two primary paths to green or preferred financing, that really can encompass any project.
Freddie Mac offers similar multifamily green lending options through their Green Up®, Green Up Plus®, and Green Certified programs.
The property-assessed clean energy (PACE) model, allows private property owners to realize financing savings for renewable energy systems. While only 3 States have residential programs, there are 37 states that have commercial programs.
This is an interest rate reduction program that offers substantial savings via large basis point reductions on residential loans. There are three primary requirements to be able to participate in this program. No geographic limitations for US properties.
There are several Federal Tax Incentives available to multifamily projects with many having been extended/expanded through the signing of the Inflation Reduction Act (IRA) in 2022.
The 45L Tax Credit is a Federal Tax Credit available to new construction multifamily and single-family projects that meet energy-efficiency building standards.
This incentive provides a deduction to help make multifamily and commercial buildings more energy efficient.
The signing of the Inflation Reduction Act recently extended the 30% Federal Investment Tax Credit (ITC) for solar. The Solar Investment Tax Credit (ITC) is a tax credit (a dollar-for-dollar reduction of your federal tax liability) that you can claim for installing a solar and/or battery system on your property.
Some states or municipalities require sustainable development and/or green building certification(s) for new-builds. In order to offset the initial investment of building green, many locations have created energy efficiency specific incentives.
* This is not an exhaustive list of local green building incentives, but rather a few examples from large markets where our clients have found success. If your local municipality requires a green building program, reach out and we’ll help you figure out what incentives you can tap into!
DC currently has a strict green building code, with plans to require net zero construction by 2026. However, several incentives are readily available for builders and can be found listed on the DC DOEE webpage.
Available for a wide range of efficient technologies including but not limited to:
Available for several categories such as:
Denver requires its new buildings to achieve LEED Gold, NGBS Gold, or another approved green building standard. The state isn’t far behind, with new bills on Building Greenhouse Gas Emissions being discussed in the Colorado General Assembly. To help builders & developers understand their options, the Colorado Energy Office has a list of energy efficiency resources which include:
Several cities across Florida, such as Orlando & St. Petersburg, require LEED standards to be met on some or all new construction. Other cities, though not yet required, are promoting green standards (such as Fort Lauderdale & Sarasota). Other incentives vary by city and range from product & technology rebates (like ENERGY STAR-certified appliances) to expedited review incentives, reduced building permit fees, and solar incentives. Here are a few examples of various programs:
Due to the increasing demand for grid power, and the ever-increasing costs of energy generation, many power providers and utility companies are offering major incentives to those that build more efficient structures and install high performance equipment.
The term ‘Utility Incentives’ can have a variety of different meanings. Many of these incentives are more lucrative and attainable than they would appear at first glance. This is where Southern Energy Management steps in: we review your plans, talk about your goals, and asses the best route for your project to realize large savings.
* This is not an exhaustive list of incentives, but a few examples of utility programs we commonly work with. If your project is with a different utility, let us know and we’d be happy to review what efficiency or high-performance incentives they may offer.
HERO Code — or High-Efficiency Residential Option — is a voluntary section of the 2018 North Carolina Conservation Energy Code. This incentive is available to builders and developers who build energy-efficient single or multifamily residences that meet HERO Code targets in Duke Energy territory.
In an effort to reduce energy consumption from commercial properties, Duke Energy offers an energy reduction guidance and incentive program. This is for property owners building new properties that wish to explore how they can save energy on through design features, equipment, and whole property energy management systems.
For any Rocky Mountain Power customers in Utah, Wyoming, or Idaho, there are numerous options for utility incentives and rebates for energy-related improvements. Many of these incentives are available for existing properties and new construction.
Incentives are available for energy efficiency, transit, sustainable business practices, & riversmart properties. A full list can be found on the DC DOEE webpage.
Incentives are generally available for both residential and commercial buildings. However, some incentives, rebates, etc. may be tailored towards a certain type of building (i.e. single-family homes only). If you’re not finding incentives for your green property, reach out & we’ll gladly help.
Numerous things; from whole building certifications to onsite power generation, to a specific type of heat pump or water heater, to installing LED lights – the list is a long one.
Available incentives may include federal, state, municipal, and utility incentives for green/energy-efficient projects.
Not automatically. In order to receive tax breaks/incentives, you will need to apply for one of the many federal, state, or local incentives relating to your project. Remember, this may not always be a LEED-specific incentive, but rather an incentive based on the equipment installed to meet LEED’s parameters.
If you’re like many of our clients, you’ve already got a long list of to-dos. Our team is happy to help shorten your list. Let us know what you need help with and if you’ve got questions about what incentives are available to your next project. Schedule a meeting, or fill out the form below to get started.
Schedule a meeting with our green building specialists to review your project goals and challenges.