Media Release

Alliance to Save Energy, Home Builders, Industry Rally Around Home Energy Tax Credit

Release Date: Thursday, January 21, 1999

The Alliance to Save Energy, the National Association of Home Builders and 30 companies and trade associations joined together in calling on President Bill Clinton for a new package of tax incentives designed to upgrade the energy efficiency of America’s housing stock.

Prior to the State of the Union address, the Coalition for Energy-Efficient Homes asked in a letter to the President that builders and owners of homes that are 30 percent more efficient than the level set by model housing codes be eligible for a tax credit. In his address to the nation, Clinton proposed the creation of "tax incentives and investment to spur clean energy technology," a reference to tax credits for fuel-efficient appliances and homes, which is expected to be included in the President’s FY 2000 budget. The budget will be released on February 1, 1999.

The letter to the President suggested that the tax credit include:

  • Eligibility for homes that meet a standard set at 30 percent above the 1998 International Energy Conservation Code, versus the previously proposed 50 percent hurdle that few builders could meet.
  • Flat tax credit of $2,000. A flat credit would give the credit a much greater impact on housing affordability and home ownership rates by attracting builders of low-cost housing to energy efficiency.
  • An existing-home credit of 20 percent for the cost of an energy-efficient upgrade, or up to $2,000 total. By creating an incentive for the homeowner, a tax credit can take the biggest bite out of the household energy consumption apple—the existing stock of housing.
  • A home builder credit which could be passed on to buyers to boost the construction and marketing of energy-efficient homes.

Homes built to qualify for the credit would save, on average, $600 annually on utility bills and help reduce the 22,000 pounds of carbon dioxide created by the average household. "In order for the tax credit to work, it must transform the housing market to incorporate existing energy efficiency products," Alliance to Save Energy President David Nemtzow said. North American Insulation Manufacturers Association Executive Vice President Ken Mentzer added, "Energy efficiency incentives are key to achieving climate change goals while giving a boost to home ownership."