Why Build Green?

Green Building, also called Sustainable Building, offers owners a building that's been designed to use fewer resources and have less impact on our health and the environment. Green building is not just about using certain kinds of materials or systems, but is a more holistic approach to design, construction, operation and future maintenance of the structure.

Benefits

Most people won't even see the Green features, but the benefits of building Green are well worth the extra cost. A Green project will be comfortable, more durable, healthier to live in, and less costly to operate while protecting our environment by lowering emissions and conserving energy.

By building Green you:

• Use less energy
• Use less water
• Consume fewer natural resources
• Utilize innovative technology and materials
• Create better over-all indoor environmental quality
• Avoid harmful chemicals, materials and mold
• Cut waste and costs
• Create value
• Help the environment
• Are recognized as a responsible custodian of the Earth, and encourage others to take your lead

Tax Incentives

Detailed below are most of the current tax incentives associated with renewable energy as it relates to the residential building industry, but first let us clarify the definition of a tax credit. There is a big difference between a tax credit and a tax deduction. A tax credit is a one-for-one dollar reduction in your total tax bill. Think of it in terms of the government giving you credit for an amount owed on your tax bill. A tax deduction reduces your taxable income. Once you have all of your deductions taken off of your total income, this amount is what you will be taxed against. Both serve to reduce the taxes owed but a tax credit is more beneficial than a deduction.

First Time Home Buyer up to $8000.00 credit

• First time home buyer defined as someone who has not owned a principle residence during the three-year period prior to the purchase
• The tax credit does not have to be repaid
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8000
• The credit is available for homes purchased on or after January 1, 2009 and before December 31st, 2009
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the tax credit

Tax credits at 30% of the cost, with no upper limit through 2016 (existing and new construction)

• Geothermal heat pumps
• Solar Panels
• Solar Water Heaters
• Small Wind Energy Systems
• Fuel Cells

Home Improvement (existing homes only)

There are numerous home improvement tax credits in place for 2009. Although most are not applicable to the new construction industry, they are worthy of mention as they pertain to the remodeling and renovation aspects of the Green Building Industry.

• The improvement must be placed in service from January 1, 2009 through December 1, 2009
• The improvement must be for the taxpayer’s principle residence
• $1500 maximum total tax credit for all improvements, on the basis of 30% of cost up to the maximum
• Provide the Manufacturers Certification Statement
• The improvement must meet specified standards (i.e. Energy Star, 2009 IECC, AFUE and SEER ratings)

Improvements include, but are not limited to window and door replacement, roofing, insulation, HVAC (excluding heat pumps), and water heaters.

Resale Value

The resale market is speculative and to associate any future property value assessments to current real estate holdings is naïve. There is no doubt however that the future value of a home built to the rigorous standards of the LEED® for Homes Rating System will retain higher value and see higher demand than one built to the Illinois Residential Code (IRC 2004) standards required of most Building and Zoning Departments today.

Let us assume the same resident occupies a home for ten years. Any home built to the IRC 2004 standards today will likely require upgrading of HVAC systems, electrical systems, replacing windows and tightening the home’s building envelope to make it compatible with the standards of new construction that will exist within the next decade. The “Green on Prairie” project and subsequent ventures will significantly, if not entirely eliminate the need for such improvements, being that it has been constructed years beyond the normal practices of today.

It is undeniable that the move to environmental practices that focus on preservation of resources and the use of alternative energy is the future.

Reduced Energy Costs and Consumption

Water consumption, electricity, natural gas, interior and exterior property maintenance, taxes and insurance all add to the cost of home ownership. In many cases these expenses equal or are comparable to the mortgage payment. The goal of the entire green building movement is to reduce the operating costs of our homes while preserving energy resources and lessening our negative impacts on the environment. To provide a calculation for energy savings in any building, several basic parameters and assumptions must be made, from building occupants and usage to Gas and kWh rates charged by utility service providers.

By using various calculations from resources such as the Energy Star program, the US Department of Energy, and specifications from various mechanical suppliers of ground source heat pumps and water heaters, we can provide an estimation of operational savings for one year. We are comparing our “Green Prairie” home to that of a similar home built to the standards of IRC 2004, using energy prices annualized for our area in 2008.

First year operational cost savings analysis

	Baseline Residence*	LEED Home	Annual Savings
Annual Natural Gas $.82/Therm	$907 for 1106 Therms	$347 for 424 Therms	$560
Annual Electricity $.0823/KWh	$680 for 8265 KWh	$442 for 5372 KWh	$238
Annual Water Consumption	$188 for 70K gal	$126 for 47K gal	$62
Annual Savings**			$860

*90% efficient furnace, R13 wall insulation, R30 ceiling insulation, standard appliances & lighting fixtures, Central AC, double pane Low E glass windows, siding, wood fireplace, full basement, 3 bathrooms, family of 4-5

**This savings is for one year only: significantly increasing in future years, proportionate to energy prices.