guest post by Jonah Trenton – refinancemortgagerates.com
Energy-efficient homes increase in value and provide homeowners lower utility bills in the future. At present, people involved in home building and renovation are finding new ways of reducing the use of natural resources. Green design alone is not enough to build or renovate a home. However, financing a greener home requires spending money. This is why there are programs designed for homeowners to incorporate technology to save on energy and bills. Homeowners can also consider refinancing to save the monthly funds needed for green upgrades.
Southern California is one place where the weather can be hot during summer months. Homeowners will need to use air-conditioner to experience comfortable cooling. However, some cooling equipment can take their toll on the homeowner’s utility bills. This is why part of remodeling homes should include choosing cooling equipment that allows big savings. With energy-efficient air conditioners, people can save up to 10 percent of total energy costs.
Southern California also has high water pressure that can result in large water bills. When low flow fixtures are installed, water consumption can be reduced between 50 and 70 percent. The device for low flow fixtures cost around $8.
Programs That Can Finance a Greener Home
• Federal Housing Authority Loans
Federal Housing Authority loans are intended for properties on the market that require repairs or renovation. Lenders see these properties as risky. When homeowners decide to convert properties into greener homes, the repair cost is financed into the loan. A down payment of 3.5 percent is required. This is based on the total purchase price and the cost of repairs. The amount of money that borrowers will receive is based on the property’s as-is value. This still does not include the costs of repairs. Lenders can finance up to $35,000 to cover the renovation costs when borrowers choose a streamlined mortgage. It is important that specific requirements such as energy efficiency standards are met.
Homeowners who want to consider greener homes may also seek financial assistance from the Energy Star program. They evaluate energy usage in electronics, heating and cooling products and building materials. They also offer lower cost loans for new homes. Homeowners who want energy efficient renovations can also rely on the program. It is important for borrowers to complete an energy audit to qualify for the program. A twenty percent reduction in energy usage is required for existing homes.
• Department of Housing and Urban Development Energy Efficient Mortgages
Homeowners can reduce the costs for energy efficiency upgrades when they choose to borrow from the Department of Housing and Urban Development.
They provide refinanced and new mortgages, and the program is available in all 50 states.
Next Post, energy efficient home renovations
Imagine getting a credit from SoCal Edison instead of a bill. Net-zero homeowners rely on power from utilities at night but get credit for the energy they produce during the day that they don’t consume. If you live in a smart home with solar power and get involved with California’s net meter programs, your energy credits for the power you create and do not use. Shine sun shine.
Net metering allows homeowners to get credit for the power they produce at a retail rate rather than a wholesale rate…nice incentive, yes? There is currently a cap on net metering programs, but experts say the cap won’t be hit any time soon.
“The energy that I don’t use Edison buys from me,” notes green home owner Steve Rosen. “It looks like I may not have an electric bill next year, because the electricity, all of it is going to keep on adding to that credit. I still have to pay delivery and handling charges, but that is just a couple of bucks a month.”
Environmentalists began pushing for California to mandate that new homes come with renewable energy systems in the early 2000s, as the technology became more scalable and available. Now there’s no other way.
In 2008, California energy regulators adopted a long-term plan that called for having all new residential buildings achieve zero net energy use by 2020 and having all commercial buildings achieve zero net energy use by 2030. And…it looks like we just might get there.
Sunny day? Let it shine…and let it make you money.
by Jodi Summers
Ever hear of the California Solar Rights Act and Solar Shade Control Act? Yeah, neither have we. These acts give California, “A near absolute right to install solar energy systems as long as there will not be an adverse impact upon public health or safety,” observes Anthony Marinaccio an associate at Alvarez-Glasman & Colvin, who specializes in the fields of land use, solar rights, government relations, environmental law.
“These two Acts are powerful tools for developers and commercial property owners to use when planning to install or incorporate solar panels on their properties—either as part of an existing project, a new project, or a ‘solar farm,” advises Matthew Gorman, a partner at Alvarez-Glasman & Colvin, who specializes in the fields of land use, solar rights, government relations, environmental law.
The Solar Rights Act “empowers developers to incorporate solar energy systems into the projects by barring cities, counties, and other local governments from establishing obstructions to the installation of solar energy systems and by streamlining the issuance of permits for such systems,” points out Marinaccio.
To be empowered, developers must ensure that the solar system meets all local and commercial health and safety standards. The Solar Rating Certification Corp. or other comparable national organization will certify all solar energy systems for heating water. The National Electric Code and Public Utilities are responsible for the standards of safety and reliability, which must be met for solar energy systems that produce electricity.
Once these three criteria are satisfied, a developer nearly has a right to install such solar panels in conjunction with local rules.
By Jodi Summers
This is an extremely noteworthy comment, as Buffet built his Berkshire Hathaway empire selling securities. “It’s a very attractive asset class,” Buffet continued about single family homes. “If I knew where I was going to live the next 5 or 10 years, I would buy a home and finance with a 30 year mortgage. It’s a terrific deal. It’s a leveraged way of owning a very cheap asset.”
When the “Oracle of Omaha” offers advice, it’s worth a listen…
The Southern California housing market kicked off 2012 with slightly higher sales and slightly lower prices > despite record-low mortgage interest rates. Home sales skewed toward the lower price ranges – normal in the first quarter. The buyer’s market was dominated by investors heeded Buffett’s advice and snapped up homes at a record level. According to DataQuick Information Services, the Los Angeles area sales have increased year-over-year for five of the last six months.
Buffett has been paying close attention to the housing crisis. His company, Berkshire Hathaway, bought portfolios of subprime mortgages and froze their rates, in an attempt to help distressed homebuyers.
Warren Edward Buffett (born August 30, 1930, in Omaha, Nebraska) is an American investor, businessman and philanthropist. He is regarded as one of the world’s greatest stock market investors, and is the largest shareholder and CEO of the insurance and investment Berkshire Hathaway.
A wise businessman, Buffett has also stretched into the green building sector. He recently expanded Clayton Homes, one of his business subsidiaries, to produces a line of green modular homes. These 750-square-foot eco homes, dubbed “i-houses,” can be purchased online for less than $75,000.
In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation. In 2007, he was listed among Time’s 100 Most Influential People in The World.
Isn’t it time you made your mark? Given today’s historically low interest rates, and property values well off their 2007 peaks, there may never be a better time to invest in real estate.
We’re here to help you with your property needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.
By Jodi Summers
Heads up to the accounting department > you may think your company has a green policy, but many businesses are missing key green financial opportunities. The reason? A lack of communication / collaboration between tax and sustainability departments.
Here’s the rub > 28% of tax directors believe their company has a sustainability strategy or is developing one, compared to 90% of CSOs recently surveyed by Ernst & Young LLP. Get on it before you CEO finds out. Think RSIO > Reduce, Switch, Innovate, Offset
“Reducing energy consumption and carbon emissions, switching to alternative energy and fuel sources, innovating for cleaner technologies and offsetting carbon emissions – all of these efforts have tax considerations,” said Paul Naumoff, Global and Americas Leader of Climate Change and Sustainability Services and CleanTech Tax Services. “Companies with tax departments that aren’t taking sustainability efforts into account are missing an opportunity.”
Apparently, many businesses are leaving green of money saving opportunities on the table. Only 16% of companies with an environmental sustainability strategy have their finance departments actively involved, according to the Ernst & Young survey titled “Working Together: Linking sustainability and tax to reduce the cost of implementing sustainability initiatives.” The survey featured responses from 223 senior executives at companies. Of the survey respondents, 19% were Chief Sustainability Officer (CSOs), while 81% were tax directors or their equivalent.
All cushy with their positions, employees are not keeping up to speed with state and local green incentives, as more than 37% of survey respondents are unaware of incentives for sustainability initiatives. Sure, more than 80% of finance department are aware of federal tax deductions for energy efficient buildings and incentives for renewable energy, but when it came to state tax credits and incentives, awareness levels hovered around 50%…and a meager 17% noted that their companies actually use available green incentives. In other words, companies are spending a lot more money than they need to spend.
Ernst & Young LLP notes that a company can effectively internally communicate sustainability initiatives and identify incentive opportunities throughout the organization by framing the discussion in broad categories:
· Reduce consumption of natural resources and carbon emissions.
- Switch to alternative energy and fuel sources.
- Innovate and develop new clean technology and less carbon-intensive or lower-emitting products and services to meet the demands of the transforming economy.
- Offset carbon emissions.
Opening up a corporate dialogue using RSIO framework allows companies to better identify incentives and tax credit opportunities related to their sustainability initiatives > improving their return on investment.
Some national examples of incentives include:
· Federal: IRC Section 179D: An energy efficiency tax deduction for commercial buildings can help reduce the cost of green building strategies and help building owners minimize energy consumption and improve energy efficiency.
- LEED Buildings: Businesses can make use of the framework provided by the Leadership in Energy and Environmental Design (LEED) to achieve specific environmental sustainability metrics in their building construction. LEED incentives are currently offered by 5 states, 18 counties and over 69 cities and towns. These include property tax abatements, income tax credits, and non-monetary benefits such as expedited permitting.
· Federal: IRC Section 45 & 48: For facilities that produce and sell electricity generated from certain renewable resources, Section 45 provides an annual credit per kilowatt hour of energy sold to an unrelated person or company for each of the first 10 years of operation of a renewable energy facility.
· Federal: The U.S. Department of Energy’s (DOE) Funding Opportunity Announcements: DOE provides grants for energy efficiency and renewable energy projects.
· Companies looking to invest in developing countries can leverage Clean Development Mechanisms (CDMs), which, as defined in the Kyoto Protocol, allow companies to invest in projects in developing countries that can be shown to measurably reduce greenhouse gas emissions. After a CDM project has been implemented, project participants receive Carbon Emission Reduction (CER) credits. Companies in industrialized countries can credit the CERs earned through their investments in CDM projects toward their emission targets, sell their CERs to buyers in other industrialized countries or trade them on global carbon markets.
In California, check with Sacramento and local governments to find benefits specific to our area. Sites like www.ey.com/climatechange are a recommended place to start.
by Jodi Summers
Now you have the power to control your utility usage with the Green Button. This possibly amazing online tool from Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric allows consumers and businesses more control over their electricity use.
“Green Button marks the beginning of a new era of consumer control over energy use, and local empowerment to cut waste and save money,” observes Aneesh Chopra, U.S. Chief Technology Officer. “With the benefits of open data standards, American app developers and other innovators can apply their creativity to bring the smart grid to life for families—not only in California but in communities all across the Nation.”
The goal of the green button is to have programmers create apps to evolve energy management technology. Projected apps include:
- Get an immediate comparison of how optional time-of-use rate plans (now offered by many utilities) will affect their bills.
- See a breakdown of their energy usage by appliance.
- Calculate their potential savings and payback for installing insulation.
- Join an energy game to rack up savings points (Simple Energy has already developed a prototype, which they showed at the meeting.)
- Figure the costs and return on investment for installing photovoltaic panels.
This trend will grow. Other utilities such as Glendale, Pepco and Oncor have committed to adding Green Button to their websites.
“Green Button marks the beginning of a new era of consumer control over energy use, and local empowerment to cut waste and save money,” observes Chopra. “With the benefits of open data standards, American app developers and other innovators can apply their creativity to bring the smart grid to life for families—not only in California but in communities all across the Nation.”
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