Green Building Grant Programs

Federal

New Energy Efficient Home Credit

Originally created by the Energy Policy Act of 2005, the New Energy Efficient Home Credit provides a $2,000.00 tax credit to a person who constructs a qualified new energy efficient home and a $1,000.00 tax credit to a person who constructs a qualified manufactured home provided that in either case (a) such person shall own and have a basis in the home during its construction, (b) the home is located in the United States and meets certain energy saving requirements, (c) construction is substantially completed after August 8, 2005 and (d) the person who constructed the home sells or leases the home to another person for use as a residence after December 31, 2005, and before January 1, 2010. See 26 U.S.C. § 45L.  Although the New Energy Efficient Home Credit expired on December 31, 2009, it may be extended for another year.  Recently, Congress passed the American Workers, State, and Business Relief Act of 2010, which, among other things, extends the deadline for this tax credit through December 31, 2010.  However, this new legislation must still go through reconciliation and be signed by the President.

Residential Energy Efficiency Credit

Originally created by Energy Policy Act of 2005, the Residential Energy Efficiency Credit provides a tax credit for the taxable year an amount equal to the sum of 30% of qualifying expenditures made by the taxpayer during such year for solar electric or solar water heating systems, fuel cell property, wind energy systems or a geothermal heat pump. See 26 U.S.C. § 25D.  All qualifying expenditures must be for property used as a dwelling located in the United States, but only qualified fuel cell property must be installed at property used as the taxpayer’s principal residence.  All of the other expenditures may be installed either at the taxpayer’s principal residence or another residence of the taxpayer.  This credit is applicable to qualifying expenditures and property placed in service before January 1, 2017.

The American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 makes grants available for eligible energy efficiency upgrades to existing properties in amounts up to $5,000 per unit through the U.S. Department of Energy’s national weatherization assistance program.  The NJ Housing & Mortgage Finance Agency (NJHMFA) has been allocated $30,000,000 of these funds for distribution to eligible projects in the State.  Under this program, an applicant must own a multifamily building containing five units or more that has an existing primary permanent mortgage with NJHMFA, agree to extend affordability controls for an additional 15 years and meet all other eligibility requirements.  Energy efficiency improvements that qualify for grant money include such things as (1) insulation, (2) air sealing and weather stripping, (3) heating system improvements or replacement, (4) refrigeration replacement, (5) lighting replacement and (6) the cost of repairs made necessary by the installation of energy efficiency improvements.

New Jersey

Green Building Grant Programs

There are many grant and loan programs and tax incentives at the State and federal level that provide monetary assistance for energy-efficient construction and renewable energy installations.  For example, the New Jersey Board of Public Utilities (BPU) through its Clean Energy Program provides green building and energy efficiency financial incentives using funds collected from the societal benefits charge authorized by the Electric Discount and Energy Competition Act, such as the Pay for Performance Program and the NJ SmartStart Buildings Program.  The BPU also offers, among other things, rebates for the purchase and installation of solar panels, inverters and racking systems that are manufactured in New Jersey through the New Jersey Renewable Energy Manufacturer’s Incentive Program.  As for tax incentives, one example is the energy efficient commercial buildings deduction under Section 179D of the Internal Revenue Code, which allows a deduction to a taxpayer for part or all of the cost of “energy efficient commercial building property” that the taxpayer places in service after December 31, 2005, and before January 1, 2012.

Green EnergyStar Programs

The NJ EnergyStar Homes Program provides developers with substantial financial incentives to construct residential dwellings that are at least 15% more efficient than homes built in accordance with the 2006 International Energy Conservation Code provided that they are located in a Smart Growth Area (i.e. Planning Areas 1 and 2 and designated centers) and score 85 or less on the Home Energy Rating System (HERS) Index.  Dwellings that meet these and other technical requirements place within the Tier 1 category of the NJ EnergyStar Homes Program.  Builders of Tier 1 dwellings are eligible to receive $2,500.00 for each single family home, $1,300.00 for each townhouse and $700.00 for each multifamily unit.  Larger per unit amounts are available for homes that satisfy the more rigorous Tier 2 and Tier 3 (a/k/a NJ Climate Choice) category requirements.

Multifamily Energy Efficiency Improvement Pilot

As a result of funding made available to New Jersey through the American Recovery and Reinvestment Act of 2009, the NJ Housing & Mortgage Finance Agency has introduced a number of new loan programs to facilitate the construction of energy efficiency upgrades and renewable energy installations in multifamily housing.  One such program is the Multifamily Energy Efficiency Improvement Pilot (MEEIP), which provides loans for eligible energy efficiency upgrades at an interest rate of two percent (2%) to owners of certain multifamily structures.  Financing is limited to a maximum of $2,000 per unit and $500,000 per project.  An applicant who seeks funding under this program must own a multifamily building that is over 20 years old and contains at least five units and must either have an existing primary permanent mortgage with the NJHMFA or propose to renovate the building into rental housing with a NJHMFA primary permanent mortgage.  Additionally, an applicant must participate in the Board of Public Utilities’ Pay for Performance Program, agree to extend affordability controls for an additional 15 years and satisfy a host of other requirements.

Renewable Energy Incentive Program

The Renewable Energy Incentive Program (REIP), which is part of the Board of Public Utilities’ Clean Energy Program offers New Jersey utility customers, who contribute to the societal benefits charge authorized by Section 12 of the Electric Discount and Energy Competition Act (N.J.S.A. 48:3-60), access to the renewable energy certificate (REC) market and rebates for the installation of renewable energy systems, such as solar, wind, and sustainable biomass facilities at existing residential and non-residential buildings and in connection with new construction located in Smart Growth areas (i.e. Planning Areas 1 and 2 and designated centers).  For example, persons who submit complete and qualifying rebate applications for solar installations during Funding Cycle 2, which began on May 3, 2010, will receive $1.35 per watt for residential projects and $0.80 per watt for non-residential projects

New Jersey Clean Energy Program

The New Jersey Clean Energy Program offers homeowners (including all electric utility customers and users of oil or propane heating systems) whole-building home energy assessments through its Home Performance with EnergyStar Program.  The cost of the home energy assessment is $125.00 and includes a visual inspection and combustion appliance testing.  Upon completion of the assessment, the homeowner will receive a report listing recommended energy efficiency measures and incentives available to help finance the recommended improvements.  For eligible energy efficiency measures that provide an estimated energy savings of at least five percent (5%), but less than 25%, a homeowner may receive a 10% cash rebate on installation costs up to $2,000 or may borrow up to $20,000.00 at an interest rate of 5.99%.  If projected energy savings are 25% or more, homeowners will receive a 50% cash rebate up to $5,000 or may borrow up to $20,000.00 interest free.