The Whole Home Approach: Spurring Home Energy Efficiency Through a Renewable and Transferrable Property Tax Incentive

Abstract

A green, energy efficient residence is ideal for many current and future homebuyers, as homeowners have become increasingly aware of their current environmental footprint1 and the potential financial savings associated with an energy efficient home. Unfortunately, a green home can also be an expensive home. Alternative energy sources, along with energy efficient building materials and appliances, frequently cost more than the industry standard and their non-renewable energy counterparts, such as fossil fuels. This paper discusses the energy rating standards currently used, and then explores the idea of a transferable, long lasting property tax incentive for the homeowner based on the overall energy rating of a home by applying a standard such as the Home Energy Rating System (“HERS”) or LEED certification process as opposed to, or in addition to, the current and itemized deductions approach. Such an incentive may spur larger investments in older homes and support the government’s goal of reducing energy consumption and the homeowner’s goal of saving money.