If you can support this effort, please sign this letter to Congress by the end of the week and encourage others to do so as well. We’d like to get this proposal to Congress before the July Fourth recess. More details on this suite of tax credits are below.
Please don’t hesitate to reach out if you would like to discuss these tax credits further.
A Comprehensive Suite of Tax Credits for Building Decarbonization:
- Energy Efficient Home Credit (45L) for new housing and major retrofits – Improve the existing 45L tax credit by adding a new incentive tier with a $12,500 tax credit for exemplary zero carbon performance for residential units that achieve a HERS Index ≤ 40 prior to inclusion of onsite renewables (or equivalent, as determined by the Secretary of Energy). Ensure 45L can be utilized on federally-supported low-income housing and Federal Historic Tax Credit projects by eliminating basis reduction associated with energy benefits. Ensure 45L can be utilized for single family to high rise multifamily buildings, including both new construction and major renovations.
- Commercial Buildings Energy-Efficiency Tax Deduction (179D) for existing commercial and multifamily buildings – Create a $15 per square foot credit for buildings that achieve a 50 percent reduction in Energy Use Intensity (kBTU per square foot) with respect to such building’s energy usage for the prior 12 months. The applicable credit would increase by $.50 per square foot up to maximum credit of $20 per square foot for each percentage point reduction above the 50 percent EUI reduction. Ensure 179D can be utilized on federally-supported low-income housing and Federal Historic Tax Credit projects by eliminating basis reduction associated with this energy benefit.
- Low Income Housing Tax Credit-Deep Energy Basis Adjustment (LIHTC-DEBA) for existing buildings – Add a 30% basis adjustment to the 4% Low Income Housing Tax Credit program for deep energy retrofits in existing buildings that achieve a minimum of a 50 percent reduction in site Energy Use Intensity (kBTU per square foot) with respect to such building’s energy usage.
- Clean Heating Credit (45X) for existing buildings – Create a 45X Clean Heating Credit, a 30 percent investment tax credit for clean heating technologies that replace existing fossil fuel combustion or electric resistance heating technology in existing commercial and multifamily buildings. Ensure 45X can be utilized on federally-supported low-income housing and Federal Historic Tax Credit projects by eliminating basis reduction associated with this energy benefit.
- Energy Efficient Appliance Credit (45M) – Provide a manufacturer tax credit to accelerate market adoption of clean heating technology, including heat pumps and heat pump water heaters, by updating section 45M of the tax code. Manufacturers would be eligible for the tax credit based on the number of additional units they make.
- Home Lead Safety Tax Credit (36B) – Create a new Home Lead Safety Tax Credit to ensure that as buildings are decarbonized, the health and safety issues associated with lead paint hazards are also addressed.