Although consultant Pieter VanderWerf believes builders should construct green homes because, inherently, "It's the right thing to do," he told attendees of the May 8-10 NAHB Green Building Conference in Dallas that few buyers are willing to pay more for such homes, which typically cost 2 percent to 18 percent more to erect.

So, in order to bring the costs down—and increase the number of potential buyers—VanderWerf advises his developer clients to obtain cash back, up to $5,000, for building green. The president and CEO of BuildingWorks in Chestnut Hill, Mass., said there are three major subsidies available for custom builders: federal tax credits, utility rebates, and trade association programs.

Homeowners also can qualify for utility rebates, energy efficiency mortgages, and insurance discounts totaling thousands of dollars.

First, VanderWerf told attendees they need to at least build to the Energy Star for Homes standard, which he said isn't hard to achieve. (Energy Star-rated homes must be at least 15 percent more efficient than a standard code-built house.) VanderWerf, a former builder who worked primarily with insulated concrete forms (ICFs), admitted it will cost $400 to $700 to have the home rated, but that the certification will open the door to rebates and other dollars.

VanderWerf also noted that even though other national green certifications, like the National Green Building Standard and LEED for Homes, don't come with rebates or discounts, they offer many intangible values. They allow builders to have independent proof that their homes are green and to generate media coverage and other free publicity.

federal tax credits

Building to the Energy Star standard qualifies a home for a federal tax credit of up to $2,000 to the builder, he continued. The tax credit is set to expire Dec. 31 for homes built and sold in 2009, but VanderWerf said he believes the Obama Administration will extend the credit.

VanderWerf noted that some states also offer energy tax credits to builders and to homeowners, and that your local Residential Energy Services Network Home Energy Rater (HERS) should know what credits their state offers.

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