BY U.S. STANDARDS, CALIFORNIA TENDS to be a pretty environmentally friendly state. Back in 1978 — in response to a legislative mandate to reduce the Golden State’s energy consumption — we began developing Energy Efficiency Standards for Residential and Nonresidential Buildings. Lately, the Air Resources Board is considering standards that would ban toxic substances such as formaldehyde from pressed wood products, glues, and adhesives.
Finally, the rest of the country is following suite. Legislation is moving green practices from the fringe to the mainstream, state-by-state, bill-by-bill. Nationally, the 2005 Energy Policy Act, encourages energy efficiency with tax credits to those who make green improvements to their homes during the 2006 and 2007 tax year.
The concept of green remodeling includes: Energy efficiency, water conservation, and healthier indoor air quality; using products and materials that are sustainable; and reusing or recycling materials rather than dumping more waste into landfills.
As far as the government’s concerned, the bigger the project, the larger the tax credit. A solar power system for creating electricity carries with it a 30 percent tax credit — or up to $2,000.The same credit goes for solar-powered water heaters used for residential purposes.
"Solar water heaters in the right kind of climate are the most accepted technology,” notes Warren Karlenzig, chief strategy officer of Sustain Lane, a green consulting firm. “But they’re not as effective if you live in a place which doesn’t get a lot of sun.”
Any energy cell system that has an efficiency rating of 30 percent and a capacity of at least.5 kilowatts receives a 30 percent cost credit — and an additional $1,000 for every kilowatt of power the system can produce.
“Before you start thinking about using solar energy or any of the other high-tech options available,” says Karlenzig, “the first thing is to do an inventory.”
Most local utilities will perform an inventory for free. It highlights the spots where energy is being wasted. This often includes windows and doorways — improvements that in the past haven’t been tax deductible but now carry credits if the materials are Energy Star-certified. Exterior windows and doors, including skylights, which meet Energy Star requirements currently have a 10 percent tax credit up to $200. Additionally, roofing and insulation or weather sealing that meets efficiency requirements earns a 10 percent credit up to $500.
The Environmental Protection Agency Energy Star programs and products help save the environment and save consumers money by using less energy through advanced design or construction. For more information, check out www.energystar.gov.
In addition to the Energy Star program, two new sets of national residential guidelines have been introduced to the market-place: The National Association of Home Builders’ Model Green Home Building Guidelines and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) for Homes initiative. The national programs are intended to encourage the mainstream home-building industry to adopt sustainable practices.
“It’s all connected — you save money, you save energy,” says Karen Schneider, an environmental protection specialist at the EPA. She points out that the average American home emitted 22,000 pounds of carbon last year. “Credits are paid for 2006 and 2007, but the payoff will be for the life of the product.”
The EPA believes that the benefits can be two-fold. Efficient materials can reduce energy costs by up to 30 percent. That’s an average annual savings of $600 to the average American household, which spent $1,900 on energy bills last year.
Green often costs a little more upfront — roughly two to five percent more — but the savings appear immediately. For example, stepped-up insulation means you can install smaller, more efficient heating and AC units. Buyers and builders can also save by opting for recycled materials, according to the Green Building Initiative.
“Green-built homes don’t have to cost so much more,”observes architect Peter L.Pfeiffer. “They just have to be better thought out.”
If you’re looking for the most consistent long-term green solution, the answer lies at your local nursery: Trees. Summer heat flows through the east and west of a North American house, and the Environmental Protection Agency estimates that mature trees planed on eastern and western exposures can reduce temperature by almost 10 degrees in summer months. In some cities, such as Sacramento, local governments give trees away in order to reduce strain on the power grid.
At the moment, there are no tax deductions for planting trees.
For more information regarding green energy savings, please consult your accountant.
JODI SUMMERS negotiates investment properties for Sotheby’s International Realty. She or (310) 260-8269. Visit her Web sites at www.SoCalInvestmentRealEstate.com and www.santamonicalandmarks.com.
Originally published in the Santa Monica Daily Press print edition on March 21, 2007. Read the original PDF.