United States Tax Incentives

The Energy Policy Act of 2005 (EPACT 2005) incorporates key provisions on energy efficient commercial and residential buildings. The legislation provides tax deductions for commercial construction that exceeds the minimum energy efficient construction standards as required by ASHRAE 90.1, as well as tax credits for highly energy efficient residential construction.

On the commercial side, EPACT 2005 offers a tax deduction for building owners who make building improvements that reduce energy and power costs by 50 percent over ASHRAE 90.1-2001. While this level of performance is a significant improvement, current insulation, HVAC and lighting technologies can meet this criteria.

Specifically, the tax deduction is equal to the cost of energy-efficient improvements installed in a building up to a maximum limit of $1.80 per square foot. To qualify, the energy-efficient commercial building improvements must be installed as part of one or more of the following building systems: interior lighting; heating, cooling, ventilation and hot water; and the building envelope – which includes insulation. (Overview of Commercial Tax Deduction)

On the residential side, there is a tax credit of $2,000 for site-built homes that are certified to have a level of annual heating and cooling energy consumption that is a least 50 percent below that of a comparable home constructed in accordance with the 2003 International Energy Conservation Code. Manufactured homes are eligible for the $2,000 credit in the case of a 50 percent efficiency improvement and $1,000 credit for either a 30 percent improvement or compliance with the ENERGY STAR^® criteria for manufactured homes. (Overview of Residential Tax Credit)

Canada Tax Incentives

There are many different programs under federal, provincial, territorial and municipal entities that offer grants and incentives to improve energy efficiency of buildings

For example, the federal government provides grants and incentives (consult ecoENERGY Retrofit) to homeowners and small and medium-sized businesses, industry and public institutions to help them invest in energy and pollution-saving upgrades.

In addition to the grants available under ecoENERGY Retrofit – Homes, selected provincial, territorial and municipal entities also offer grants and incentives to homeowners who conduct energy saving upgrades. For example:

• Canada Mortgage and Housing Corporation offers a 10 percent refund on its mortgage loan insurance premium when a borrower buys or builds an energy-efficient home. To qualify for this refund, the home's energy efficiency must be rated using the EnerGuide rating system or be R-2000 certified and meet certain minimum requirements.
• Built Green Municipal Incentives in Alberta and British Columbia offer a building permit fee rebate for homebuilders who achieve R-2000 or Built GreenTM certification. Upon meeting all permit and inspection requirements, rebates will be issued to the building permit applicant, calculated on a percentage of the base building permit fee.
• Nova Scotia's Department of Energy provides incentives to offset the initial cost of an EnerGuide building plan evaluation. Homeowners receive $175 for a rating of less than 77 on the EnerGuide scale, $350 for a rating between 77 and 79 and an EnerGuide rating of 80 or higher earns an incentive of $500.00.
• Buyers of new high-efficiency Novoclimat-certified houses heated with natural gas and located in Gaz Métro territory can obtain a $2,000 incentive from Quebec's Energy Efficiency Fund .
• Efficiency NB offers new homeowners a grant up to $3,000 if their home has an EnerGuide rating of 80 or higher, depending on the heating system. There are four versions of this grant:
• Saskatchewan has announced rebates of up to $2,400 for buyers of energy efficient new homes .

For information on incentives and rebates in your region, check out the Environment Canada Incentives and Rebates web site: http://www.ec.gc.ca/incitatifs-incentives/index_eng.asp.