Utility Programs and Incentives for Zero-Energy Homes

There are many federal, state and utility tax credits, grants, rebates and other incentives available to support home energy efficiency and renewable energy systems. Although the incentives for efficiency and renewable energy are offered separately, they can often be combined to achieve a higher incentive level for zero energy homes. And a few Southwest utilities now offer incentives for highly efficient homes.

This section provides an overview and links to government incentives and utility programs for zero energy homes. Several types of incentives, including tax credits and rebates, are available for energy efficient technologies, renewable energy systems, or production of high performance homes. The incentives are summarized in the table below, followed by detailed program descriptions.

  Energy Efficiency Incentives Renewable Energy Incentives
State Utility-Sponsored New Homes Programs State tax credits for energy efficient new homes Local incentive programs and funding Solar PV buydown or rebate programs Renewable energy system tax credits
AZ x     x x
CO x   x x  
NV x     x  
NM x x x x  
UT x     x x
WY       x  

Federal Incentives

Federal Residential Solar Tax Credit

The Energy Policy Act of 2005 established a 30% tax credit up to $2,000 for the purchase and installation of residential solar electric and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaics system and a 30% credit up to a separate $2,000 cap for a solar water heating system. For more information, visit www.energystar.gov/index.cfm?c=products.pr_tax_credits#s4.

Utility Programs and Incentives by State

Major utility programs and incentives in each state are listed below. For more detailed information about programs available in your specific area, visit the DSIRE website, a comprehensive database of incentives that promote renewable energy and energy efficiency.

Arizona

  • Arizona Public Service (APS)
    ENERGY STAR Homes Program

    APS has teamed with EPA and a number of Arizona homebuilders to create the ENERGY STARĀ® Homes program. APS began its partnership with EPA in 2005 with the promotion of ENERGY STAR certified new homes and has since expanded its partnership to offer Home Performance with ENERGY STAR (HPwES). APS collaborates with the homebuilders to ensure that these ENERGY STAR Homes meet or exceed the stringent ENERGY STAR energy efficiency standards. Energy efficiency features incorporated into these homes include improved insulation, high-efficiency air conditioning systems, highly-efficient lighting fixtures and appliances, and        ENERGY STAR labeled Low-E windows, amongst others. Upon completion, a certified independent contractor tests the homes to ensure they are performing to the ENERGY STAR standard. For details, see the APS ENERGY STAR Homes program website.
  • Salt River Project
    ENERGY STAR New Homes Program

    SRP has teamed with EPA and local Arizona homebuilders to create the ENERGY STARĀ® Homes program.  Prior to launching ENERGY STAR the utility previously sponsored their own new homes program called PowerWise Homes. The SRP program ensures the new homes meet or exceed the ENERGY STAR Homes requirements.  Energy efficiency features incorporated into these homes include improved insulation, high-efficiency air conditioning systems, highly-efficient lighting fixtures and appliances, and ENERGY STAR labeled Low-E windows, amongst others. Upon completion, a certified independent contractor tests the homes to ensure they are performing to the ENERGY STAR standard.  For details, see the Save with SRP ENERGY STAR Homes program website.

Colorado

  • Colorado Springs Utilities:
    ENERGY STAR New Homes Incentive

    The Builder Incentive Program is designed to encourage Colorado Springs homebuilders to qualify their homes under the U.S. EPA ENERGY STAR New Homes program. Builders will incur upfront costs to integrate energy-efficiency measures in their building practices and to pay for third-party verification. This program is intended to partially offset these costs. Qualified homes are eligible for incentives up to $800 per home. For more information, see the ENERGY STAR New Homes Incentive web site
  • Fort Collins Utilities:
    Integrated Design Assistance Program

    The Integrated Design Assistance Program (IDAP) offers financial incentives and free technical support to those interested in delivering high-performance buildings that exceed building code requirements for energy performance. Fort Collins Utilities customers can select from two options, the Whole Building Approach and the Prescriptive Approach. Each of these approaches provides different levels of incentives and technical support. For details, visit the IDAP  website.
  • Xcel Energy Utilities:
    The Xcel ENERGY STAR New Homes program is available across the Colorado Xcel territory.  The program provides a tiered builder rebate structure starting with rebates of $100 up to $1,200. The program provides these incentives to builders based upon the homes HERS scores from a HERS 75 to 60 or lower. An additional $200 is provided to the builder when the house is ENERGY STAR certified and includes and ENERGY STAR qualified refrigerator and dishwasher. For more information visit the Xcel ENERGY STAR New Homes website.
  • Black Hills Energy Utility
    Offers a new home program for homebuilders with multiple paths to receive incentives from the utility.  The BHE New Construction Program provides a prescriptive component option and a performance option that takes a whole house approach.  The homebuilder can receive up to $1500 of incentives for the prescriptive path and the builder can receive an incentive from $1600 to $5300.  The prescriptive path requires high efficiency HVAC and wall insulation that meets the 2012/2015 IECC wall requirements. The performance path requires at least 94 AFUE furnace efficiency, 0.64 EF hot water efficiency with an option of a tankless water heater for the highest rebate level.  Additional information can be found at the BHE new construction program page.

New Mexico

  • Sustainable Building Tax Credit
    SB 463, enacted in April 2007, established a personal tax credit and a corporate tax credit for sustainable buildings in New Mexico. The amount of the credit varies according to the square footage of the building and the level of certification achieved, as indicated on the following chart:
  • Residential Buildings:
    Rating Level Occupied SqFt Tax Credit/SqFt
    Build Green NM Silver or LEED-H Silver First 2,000 $5.00
      Next 1,000 $2.50
    Building Green NM Gold or LEED-H Gold First 2,000 $9.00
      Next 1,000 $4.45
    ENERGY STAR Manufactured Home Up to 3,000 $3.00

All rebate funds have been reserved through 2016.

To receive the tax credit, the building owner must obtain a certificate of eligibility from the Energy, Minerals and Natural Resources Department after the building has been completed. The Department will only grant certificates in any given calendar year until the equivalent of $5,000,000 worth of certificates for commercial buildings and $5,000,000 worth of certificates for residential buildings have been awarded in that calendar year. Further, no more than $1,250,000 of the annual amount for residential buildings can be applied to manufactured housing.

The taxpayer must then present their certificate of eligibility to the Taxation and Revenue Department to receive a document granting the Sustainable Building Tax Credit. If the total amount of a Sustainable Building Tax Credit is less than $25,000, the entire amount of the credit can be applied to the taxpayer's income tax in that year. If the credit is more than $25,000 the credit will be applied in increments of 25% over the next 4 years. If a taxpayer's tax liability is less than the amount of credit due, the excess credit may be carried forward for up to seven years.

For more information, see the Sustainable Building Tax Credit website.  

Utah

  • Questar Gas:
    ThermWise Builder Program
    Questar Gas is offering builders rebates for building more energy-efficient new homes. High-efficiency gas equipment and specific construction practices such as the use of a 2 x 6 exterior wall in new homes range from $50 - $750 for storage water heaters, tankless gas water heaters, gas furnaces and boilers and solar-assisted gas water heaters. The ThermWise Builder Program offers four construction options for builders starting with homes that comply with the 2009 IECC up to an ENERGY STAR certified home with a HERS score of 50 or lower. Rebates for these options are from $50 to  $500. For details, visit the ThermWise Builders website.
  • Rocky Mountain Power:
    ENERGY STAR New Homes Program for Builders
    The Rocky Mountain Power (RMP) wattsmart New Homes program offers cash incentives to contractors who build energy-efficient homes. To qualify for this incentive, the new home must meet the basic requirements of the 2009 IECC. Contractors building qualified homes can earn rebates worth up to $500 per single-family home, or $200 per unit for multi-family homes. Additional rebates ranging from $10 per unit to $1750 per home are available to contractors who install energy-saving measures/equipment. Participating contractors also have the opportunity to be featured in RMP-sponsored advertising and marketing, and can have access to additional cooperative marketing funds to promote their company as a program participant. For more information, visit the wattsmart New Homes Program for Builders website.