amount for the qualified residence based on energy efficiency improvements made by the taxpayer and placed in service during such taxable year, or (2) 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. (b) Applicable amount (1) In general 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. (2) Efficiency ratio 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— (A) an amount equal to the difference between— (i) the projected annual level of energy consumption of the qualified residence after the energy efficiency improvements have been placed in service, and (ii) the annual level of energy consumption of such qualified residence prior to the energy efficiency improvements being placed in service, by (B) the annual level of energy consumption described in subparagraph (A)(ii). (3) Coordination with credit for residential energy efficient property 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— (A) qualified property or energy storage property for which a credit was allowed under section 25D, or (B) qualified property for which a credit was allowed under section 25E. (c) Definitions For purposes of this section: (1) Qualified residence The term qualified residence means a dwelling unit— (A) located in the United States, (B) owned and used by the taxpayer as the taxpayer's principal residence (within the meaning of section 121), and (C) which is certified to have— (i) a projected annual level of energy consumption after