Fiscal cliff deal restarts energy efficiency tax credits

Most Americans were understandably relieved to hear that the country had decided not to throw itself over the ominous sounding fiscal cliff at the start of the new year (or at least to catch itself on the way down). But businesses and homeowners have more reasons to like the deal than just avoiding a potential recession, as the ultimate agreement included a provision extending energy efficiency incentives that had died a year ago. There are two key policies that legislators decided to renew when they passed the Compromise Bill: a tax credit for developers making more energy-efficient buildings and a smaller tax credit for homeowners buying certain energy efficient appliances and other upgrades. Both of these credits expired at the end of 2011, when the contentious atmosphere between Democrats and Republicans in congress was probably at its peak. But the renewed business tax credit will now allow contractors or developers to get as much as $2,000 per "dwelling unit" that meets a specific set of efficiency standards - the 2006 edition of the International Energy Conservation Code. The updated code won't change much for these projects, since the standards are largely the same, mostly with some clarifications that will make them easier to measure and apply. Dwelling unit requires some unpacking, since it only applies to certain buildings - obviously houses, but also condos, townhouses and even apartments so long as it's not more than three stories. This means that a multi-unit condo complex could potentially get multiple tax credits if each separate unit meets the standards. On an individual level, the Residential Improvements and Appliances Tax Credit offers to cover 10 percent of anything from energy-efficient air conditioners and refrigerators to home insulation and new windows, up to as much as $500. Perhaps just as important, legislators agreed to not only extend these tax credits through the end of 2013, but to do it retroactively, meaning people and businesses that made improvements last year could get the credit now. The American Council for an Energy Efficient Economy released some recommendations for encouraging energy efficiency, and renewing these tax credits was at the top of the list, according to SustainableBusiness.com. There are some other major steps, like the Commercial Building Modernization Act, but renewed tax credits could make a huge difference for improving energy efficiency. Sam Ritter is chief operating officer of Plymouth Rock Energy, Woodmere, N.Y.