Building Financial Incentives

Passive House is high-quality construction. Passive House can be built affordably and close to, or at cost parity, with experience. Your first couple of Passive House buildings can pose enough of an additional cost to dissuade those otherwise interested in providing the benefits of Passive House. Consequently, government and public utility program building financial incentives have been vital in instigating Passive House production. The building financial incentives are typically addressing multifamily housing, both market-rate and affordable. There are, so far, four basic forms of incentive providers:

  • Utility-based funding
  • Municipal funding
  • States with low-income tax credit-based incentives
  • Lender preferential financing pricing

Here is what we hope will be a growing list, of incentives available across the US.

Utility-Based Incentives

The two leaders in utility-based incentives, in the US, are NYSERDA and Mass Save, both covering extensive regions within their respective states.

Mass Save

Mass Save is a collaborative of local electric and natural gas utilities and energy service providers and includes Berkshire Gas, Cape Light Compact, Eversource, Liberty Utilities, National Grid, and Unitil. (Mass Save also provided training financial incentives.)

For multifamily buildings of 5 units or more, that achieve PHI certification, can receive significant incentives as noted in this graph. Incentives like these are making the difference. Find out more.

NYSERDA

NYSERDA (New York State Energy Research & Development Authority) is a quasi public-private entity, funded in large part from an energy sales surcharge from an array of energy utilities, and their customers, across the state.

New Construction: NYSERDA provides significant funding support to both residential and commercial new construction, which includes substantial retrofits, and both market-rate and affordable housing.

RetrofitNY: NYSERDA also has a dedicated program called RetrofitNY that is supporting the market transformation of large-scale retrofits utilizing approaches of Passive House and Energiesprong.

Buildings of Excellence: This program competition supports and celebrates high-performance building. Currently, in Feb 2021, the Buildings of Excellence program is finishing the 2nd of 3 rounds. With total initial funding of $40 Million, winning projects are eligible for up to $1 Million in support.

NYSERDA has a unique sign-up for Passive House program updates, here.

Municipal Incentives

Minneapolis – coming soon…

Low-Income Housing Tax Credit Based Incentives

Affordable housing has been a driver of Passive House building since the 1990s. As jurisdictions connect the dots and push to deliver high-quality housing that protects the health and budgets of occupants, Passive House has appeared in more affordable housing incentive programs, particularly the Qualified Allocation Plans (QAPs) of those using low-income housing tax credits (LIHTC). In the competitive market of LIHTC financed affordable housing, points for Passive House can mean the difference between qualifying for funding or not. This has been most dramatically demonstrated in Pennsylvania but the basic approach has been adopted by many state low-income housing funding efforts. Here is a list of states, with links to programs, currently offering credit for Passive House buildings.

Lender Preferential Pricing

Lenders are becoming aware of the benefits of Passive House performance in underwriting and are recognizing it in their application process to obtain better rates.

Lender Resources

The Community Preservation Corporation (CPC) has issued an important mortgage lender’s handbook Underwriting Efficiency, that identifies Passive House as an important qualification. Visit the CPC website.