Green Building Incentives Still Available

October 25, 2010

Money“There is a lot of financial assistance for green building – and it’s growing all the time,” according to a recent article in GreenSource magazine. “The level of funding has increased substantially, but there are still challenges to access,” says Paul Naumoff, national director of business incentives and tax credits at financial services firm Ernst & Young. Here are some sources to look into:

1. Energy-Efficient Commercial Building Tax Deduction – A Federal tax deduction, which reduces taxable income, and is worth up to $1.80 per square foot in commercial buildings. Set to expire in 2013, the incentive rewards efficiency in lighting, mechanical systems, and the building envelope. Projects that can show a savings of 50% over ASHRAE 90.1-2001 using a whole building simulation are eligible for the full amount. Partial deductions are allowed for efficiencies in the listed systems.

2. American Recovery and Reinvestment Act (ARRA) – This program doesn’t offer direct incentives to green buildings, but includes provisions for additional funding for renewable energy, weatherization, transit, and training. Many of the funds are distributed through federal agencies or state governments.

3. State Incentive Programs – State and local governments offer many tax breaks for energy efficiency and green building – 41 different incentives according to the Database of State Incentives for Renewables and Efficiency (DSIRE). The site lists 18 incentives for green building, including non-financial incentives (such as expedited permitting). According to the U.S. Green Building Council (USGBC), 213 localities and 34 state governments have LEED related policies or legislation.

4. Non-Financial Incentives – Expedited permitting allows green projects to be given priority during plans review over conventional projects. This saves time and money for developers. Seattle offers density bonuses to downtown projects that achieve LEED Silver or higher certification. Projects are allowed to have larger floor area ratios (ratio of total floor area to site area), and greater heights than zoning laws allow.

Other options include loan programs, property tax incentives, rebate programs, sales tax incentives, and utility rate discounts. Check out the references below for more specific information.

Tax Incentives Assistance Project

Database of State Incentives for Renewable Energy (DSIRE)

EERE Financial Opportunities

Photo courtesy of Danial Borman through a Creative Commons License.



Dawn Killough

has over 15 years experience in the construction industry and is the author of Green Building Design 101, an e-book available from Amazon. She is a LEED AP and Certified Green Building Advisor, and has worked on the LEED Certification of three projects in Salem, Oregon.