Monday, August 22, 2011
Helping Businesses Take Advantage of Tax Deductions for Energy Efficiency
There are numerous reasons for being aware of energy usage in your building as green building trends move into the mainstream and taking advantage of energy-efficiency incentives can have a positive impact on both the environment and your company’s financials. One of the first steps any building owner can take toward an effective energy savings program is to establish the energy use of your building(s) and set a desired savings. Using new, easy to use tracking tools, you can establish the current energy use of your building and assess it with a free, online tool such as www.energystar.gov/ benchmark. This EPA energy use rating system will rate your property on a scale of 1 to 100, and help you determine a reasonable energy savings goal.
Whether you are retrofitting an existing property, or installing energy efficient systems in new construction, the Energy Policy Act of 2005 includes a tax deduction for investments in “energy-efficient commercial building property” designed to significantly reduce the heating, cooling, water heating, and interior lighting energy cost of new or existing commercial buildings. In order to qualify for the tax deduction, energy-efficient property must be placed into service between January 1, 2006 and December 31, 2013 and you must obtain certification that meets the requirements of Section 179D(1) from a qualified individual.
Capital Review Group works with business owners to provide such certification through an approved process. CRG conducts a physical inspection and performs an Energy Efficiency Study (EES) to calculate, determine and certify the allowable deductions for part or all of the cost of the Energy Efficient Lighting, HVAC, hot water, and building envelope – or any one of these Sub-Systems that have been placed in service during the appropriate timeframe.
The tax deduction is generally received by the organization or individual who pays for construction, whether it is the building owner or, for certain projects such as lighting or HVAC, the tenant or lessee. In the case of government owned buildings, the primary designer may be eligible for the tax deduction.
CRG can determine if you are eligible for a tax deduction of up to $1.80 per square foot for improving the energy efficiency of your existing commercial buildings or designing high efficiency into new buildings.
There are many different options for creating energy-efficient systems that may qualify for deductions under Section 179D(1). If you are considering improving or upgrading your systems to meet energy efficiency requirements, or think you may be eligible for tax deductions for existing energy efficient buildings or systems, contact CRG for a thorough analysis of your project.