Incentives are the second category of a municipal Green Roof strategy. It is important to point out, that only a small number of instruments in this sector will require an additional financial budget by the municipality (e.g. financial grants for Green Roof installations). In the Green Roof Policy Toolkit indirect financial incentives are more prevalent. Tax incentives for Green Roofs can be part of the respective tax codes (cp. reduction of the stormwater tax) and financed by all tax payers. The Density or Floor Area Ratio (FAR) Bonus for building designs with Green Roofs is another non-financial incentive which has been used by a number of municipalities with great success. Green Roof incentives are a flexible, market-related tool which can be applied to both new and already existing developments. In combination with Green Roof regulations, incentives can make the compliance with the rules easier (Carrot and Stick Approach) and developers are more likely to support Green Roof policies. 

Direct Financial Incentives

Green Roof Grants: Some municipalities are offering attractive start-up grants to cover a part (typically 10-50 %) of the Green Roof construction costs. The aim of the financial subsidies is to motivate owners of privately owned or commercial properties to create additional green spaces on the city's roofs on a voluntary basis. Green Roof grants can be combined with specific conditions (e.g. minimum water retention, substrate depth, biodiversity, use of environmental friendly materials, maintenance) to support Green Roofs with a very high ecological quality. In most municipal examples it is irrelevant whether the buildings are new or retrofitted. Green Roofs that are required as a condition in land-use plans or zoning codes by the municipality (see section “regulations”) are, however, very often excluded from direct financial subsidies. A requirement of Green Roof grants are adequate funding sources for the subsidy over a longer period of time. When a city has tight budgets there should be special emphasis on indirect financial incentives.

Indirect Financial Incentives

Stormwater Tax or Stormwater Utility Fee Reduction: Charging separate fees for the disposal of sewage and stormwater is a way to support sustainable stormwater management initiatives (de-paving, bioswales, cisterns or Green Roofs) by the property owners. The calculation of the storm water fee is normally based on the total area of the plot and the proportion of property surface that is impervious. Green Roofs differ from standard tiled or gravel-covered roofs in that they are able to store a large proportion of the water from precipitation and release any excess water gradually over time. These are recognised as unsealing measures and rewarded with a reduced storm water tax. The special advantage of this tool is that it also supports the process to retrofit existing roofs with a vegetation layer.

Density or Floor Area Ratio (FAR) Bonus: The Density or Floor Area Ratio (FAR) Bonus method can earn a developer or builder a larger development footprint or additional floors than code would usually allow if their project includes environmental or community benefits. For example, including a Green Roof could allow a developer to build a bigger building or add more stories to the structure. The Floor Area Ratio (FAR) is also known as Floor Space Ratio (FSR), Floor Space Index (FSI), Site Ratio, Plot Ratio or Gross Plot Ration (GPR) depending on the country.

Tax Incentives or Fee Waivers: In addition to the stormwater tax reduction other municipal and governmental taxes and fees provide the option to encourage the installation of Green Roofs with incentives or abatements. For example, in the U.S. roofing tax credits and property tax abatements have been used to support energy-efficient and environmentally friendly roofs. Public authorities also have the opportunity to waive fees or taxes for public services like building permits, development agreements etc. when the investor voluntarily installs a sustainable technology (solar energy, Green Roofs).

Fast Track Building Permit Process: The Fast Track Building Permit Process has been used by the City of Chicago with great success to support Green Roof installation. Developers who include a Green Roof within their building design can reduce the period of time it takes to get a building permit by a considerable number of days.

Green Loans or Favourable Credit Terms: Green loans or favourable credit terms are other instruments to make the installation of Green Roofs financial more attractive. One of the barriers of Green Roof installation are the high upfront costs for the Green Roof installation followed by a long repayment period due to the various economic and environmental benefits of Green Roofs. Green loans or favourable credit terms with low interest rates can bridge this gap. Homeowners can make the repayment of the loan in line with the money they save in the following years for energy and roof renovation.