We are often asked about government incentives or subsidies associated with SERF certification. After all, it’s no secret that LEED and others go to great lengths to get written in to the code.
We see at least 3 problems with that, the first of which is hidden cost. Municipal, county, state and national lobbying to secure favors comes at a stiff price and is one of the many factors behind the high cost of other certifications.
Moreover, the notion of artificial incentives–all government incentives are artificial, lest why would they exist–runs counter to our aim of Practical Environmental Stewardship™. Put another way, common sense solutions do not require subsidies–they work on their own!
Let me offer a timely example. Our SERF Foundation is an IRS Sec. 501(c)(3) organization. We are partnering with Michigan State University and private sector organizations to build a green office demonstration building in East Lansing, Michigan near MSU.
Our team has been making every effort in to incorporate a closed loop geothermal system in to the design of the facility. The risk of system failure was mitigated by a good, though not great, payback projection. A closer look revealed the payback was juiced by tax credits that come with geothermal.
Re-running the numbers without the benefit of these credits—what’s a nonprofit to do with tax credits– creates a lousy return on investment. So geothermal is out because we’re a nonprofit. Hmmm.
Please, no friendly suggestions on ways around this. We know they exist—but to what end? We have nothing against geothermal and may yet find a way to use it, but it remains very hard to make an economic case for its installation without federal tax credits—which are a fickle animal that may go away.
Finally, artificial incentives may retard the market for better solutions. What innovative systems are not being tried because the feds are bankrolling geothermal? Better yet, wouldn’t geothermal system manufacturers and installers be forced to improve their value proposition if taxpayers weren’t covering their margins?
We understand the arguments for subsidies and incentives, and that to fully utilize what is available is simply good business. Indeed to pass them up would be a disservice to all of your stakeholders.
But to be true to our mission of Practical Environmental Stewardship™ SERF will continue to be a voice for sustainable building solutions–and green building certifications–that stand on their own merits.