EnergyLogic was informed on February 12, 2018, that Congress retroactively reinstated the 45L Builder Tax Credit for 2017.
By April 1, 2018, EnergyLogic will be sending builders an annual report for all 2017 rated homes. Passing tax credit will be indicated on this report. Once you receive the report mentioned above, you will easily be able to access final report packets. Tax credit documentation is contained within every final report packet, regardless of a pass or fail status.
Easy Access to Retrieve Tax Credit Documents
By using your builder login to EnergyLogic’s DASH database, you can easily access these documents within the final report packet.
Contact Tracy Larson at firstname.lastname@example.org if you need directions, username, and password for the DASH builder login. Tracy will be sending a report by April 1, 2018, that lists all homes that qualified for the tax credit. This will make your search easier by shortening the list of packets you need to locate.
At this time, the 45L Builder Tax Credit has not been approved for 2018.
How the Tax Credit works:
Many may not remember how the tax credit qualification is actually quantified. Your house is imputed into the modeling software tool. Within that software (REM/Rate) the house is duplicated, thus creating two houses that are geometric twins; House A and House B. House A is assigned the energy specifications that are outlined in the 2006 IECC, and House B is assigned the energy specifications you, the builder, actually used. The tax credit is issued for House B when it is 50% more efficient in heating and cooling energy use than House A, built to the 2006 IECC. For the modeled “House,” the software determines what the 50% target is, and if the as-built house (House B) is performing equal to or better than the 50% targeted energy use.
The tax credit adds one further complication: in that it has created a two-part test to demonstrate 50% compliance. The home’s heating and cooling energy use must be 50% more efficient than the 2006 IECC, as measured by normalized end-use loads and the building envelope component loads. The building envelope component loads alone must account for at least 10% of those savings. If both of these tests pass, the house qualifies for the tax credit. According to the software compliance reports, a majority of homes pass the envelope loads test but do not always pass the normalized end-use loads test. Normalized end-use loads account for the differences in equipment types that exist when using gas or electric utilities. This is a bit of a ‘black box’ calculation; this portion of the compliance matrix has to be addressed by a specification change in order to capture more rebates.
Only homes that are tested and inspected can qualify for the tax credit. While we can do some analysis to help increase the percentage of the homes that will qualify, it is unlikely that 100% of your homes will qualify. This is because the analysis utilizes a whole-house evaluation and some of the parameters are not in the builder’s control, such as house orientation.
In order to claim the tax credit, you will need the tax credit certificate from us and IRS Form 8908.
If you have any questions, please email Robby Schwarz.
Who to Contact:
Principal, Director of Builder Relations