Sec. 5032. Energy efficiency credit for existing residential buildings
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Section 25C is amended to read as follows: In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of— the applicable amount for the qualified residence based on energy efficiency improvements made by the taxpayer and placed in service during such taxable year, or 30 percent of the amount paid or incurred by the taxpayer for energy efficiency improvements made to the qualified residence that were placed in service during such taxable year.
For purposes of subsection (a)(1), the applicable amount shall be an amount equal to $1,750 increased (but not above $6,500) by $300 for every 5 percentage points by which the efficiency ratio for the qualified residence is certified to be greater than 20 percent. For purposes of this section, the efficiency ratio of a qualified residence shall be equal to the quotient, expressed as a percentage, obtained by dividing— an amount equal to the difference between— the projected annual level of energy consumption of the qualified residence after the energy efficiency improvements have been placed in service, and the annual level of energy consumption of such qualified residence prior to the energy efficiency improvements being placed in service, by the annual level of energy consumption described in subparagraph (A)(ii).
For purposes of paragraph (2)(A), the determination of the difference in annual levels of energy consumption of the qualified residence shall not include any reduction in net energy consumption related to qualified property or energy storage property for which a credit was allowed under section 25D. For purposes of this section: The term qualified residence means a dwelling unit— located in the United States, owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121), and which is certified to have— a projected annual level of energy consumption after the energy efficiency improvements have been placed in service that is less than the annual level of energy consumption prior to the energy efficiency improvements being placed in service, and an efficiency ratio of not less than 20 percent.
The term energy efficiency improvements means any property installed on or in a dwelling unit which has been certified to reduce the level of energy consumption for such unit or to provide for onsite generation of electricity or useful thermal energy, provided that— the original use of such property commences with the taxpayer, and such property reasonably can be expected to remain in use for at least 5 years. For purposes of subsection (a)(2), the amount paid or incurred by the taxpayer— shall include expenditures for design and for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property, and shall not include any expenditures related to expansion of the building envelope.
For purposes of this section: In the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder's proportionate share (as defined in section 216(b)(3)) of any expenditures for energy efficiency improvements of such corporation. In the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual's proportionate share of any expenditures for energy efficiency improvements of such association.
For purposes of this paragraph, the term condominium management association means an organization which meets the requirements of paragraph
(1)of section 528(c) (other than subparagraph
(E)thereof) with respect to a condominium project substantially all of the units of which are used as residences. If less than 80 percent of the use of a property is for nonbusiness purposes, only that portion of the expenditures for energy efficiency improvements for such property which is properly allocable to use for nonbusiness purposes shall be taken into account. A certification described in this section shall be made— in accordance with guidance prescribed by, and by a third-party that is accredited by a certification program approved by, the Secretary, in consultation with the Secretary of Energy. Such guidance shall specify procedures and methods for calculating annual energy consumption levels, with such calculations to take into account onsite generation of electricity or useful thermal energy, and shall include requirements to ensure the safe operation of energy efficiency improvements and that all improvements are installed according to the applicable standards of such certification program. Any calculation under paragraph
(1)shall be prepared by qualified computer software. For purposes of this paragraph, the term qualified computer software has the same meaning given such term under section 45L(d)(2). For purposes of this subtitle, if a credit is allowed under this section for any expenditures with respect to any energy efficiency improvements, the increase in the basis of such property which would (but for this subsection) result from such expenditures shall be reduced by the amount of the credit so allowed. For purposes of this section, expenditures taken into account under section 25D or 47 shall not be taken into account under this section. . The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 25C and inserting after the item relating to section 25B the following item: Sec. 25C. Credit for energy efficiency improvements to residential buildings. . The amendments made by this section shall apply to any energy efficiency improvements placed in service after December 31, 2017.