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Tax Advantages to Going GreenTRANSCRIPT
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Go Green Environmental & Energy Conference
Financing & Incentives Session
Tax Advantages to Going Green
Presented by:
Joel E. Ackerman, CPA, MST
Wednesday, October 26, 2011
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Did you know?
• Every year Americans use 4 Billion kWh to brew 30 billion pots of coffee.
• Office Buildings waste up to 1/3 of the energy consumed.
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The Importance of Reducing Energy Use
Outside the BoxMaking Envelope Tight
Architectural Design for Best Energy Use
Inside the BoxConservation & Efficiency
Building Management
Systems
Indoor Air Quality
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Goal: Reduce Energy Use
In the US alone, Buildings Account for:
• 72% of electricity consumption
• 39% of energy use
• 38% of all carbon dioxide (CO2) emissions
• 40% of raw materials
• 30% of waste output (136 million tons annually)
• 14% of potable water consumption
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Economics of Green Building
▶ Green buildings, energy efficiency in buildings comes at an increased cost
▶ Incentives help to offset that cost
▶ Federal Energy Efficiency tax deductions
▶ Federal Solar tax credits
▶ State Sustainability, LEED, solar and energy tax credits
▶ State exemptions from property tax, sales and use tax
▶ Utility incentives for solar, energy efficiency, LEED
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Depreciation
Depreciation is a tax deduction that goes right to the bottom line without any additional cash outlay.
Accelerated depreciation, bonus depreciation, and Section 179 provide significant deductions in the early years these improvements are placed in service
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Cost Segregation
A Cost Segregation Study is an approved tax and engineering approach to properly allocate a real estate holding for depreciation purposes.
Bottom line benefit: Increase property owner’s bottom line by reducing tax liabilities in the early years of owning or improving one’s real estate.
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Energy Policy Act of 2005
Section 179D Enacted
• Congress passed legislation in August of 2005 to encourage property owners to build energy efficient real estate properties to promote reduction in energy consumption. Service dates were from 1/1/06 through 12/31/08.
• The Emergency Economic Stabilization Act of 2008 (HR-1424), approved and signed on October 3, 2008, extends the benefits of the Energy Policy Act of 2005 through December 31, 2013.
• The ruling allows up to a $1.80 per sq. ft. tax deduction for commercial property owners. Incentives were also allowed for contractors, site home builders and residential home owners.
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Additional Incentives and Programs
Visit www.dsireusa.org for a clickable map and a listing of all federal and state incentives for energy retrofits
• Public Utility Rebates
• Insurance Savings
• State and Local Rebates
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Quantifiable Results for Changes to Controls in 100,000 sq ft bldg
Low Est. Energy Savings %
Low Est.Cost Savings $
High Est. Energy Savings %
High Est.Cost Savings $
Adjust Temperature 1.1 2,384 2.9 6,285
After hours usage 0.7 1,517 1.5 3,251
Adjust ventilation 2.9 6,285 5.7 12,353
Limit access to thermostats 0.3 563 1.3 2,817
Optimize Start-up Times 0.6 1,300 2.9 6,285
Seasonal Changes to Thermostats 1.1 2,384 5.7 12,353
Coast Last Hour of Operation 0.6 1,300 2.9 6,285
CUMULATIVE EFFECT 7.3% $15,733 22.9% $49,629
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Quantifiable Results for Changes to Lighting systems in 100,000 sq ft bldg
Low Est. Energy Savings %
Low Est.Cost Savings $
High Est. Energy Savings %
High Est.Cost Savings $
Change incandescents to CFLs 0.6 1,300 1.2 2,601
Convert T-12 to T-8 and T-5 3.5 7,585 9.7 21,022
Delamp 3.3 7,152 5.0 10,836
Full Floor Lighting Sweeps 0.5 997 1.4 3,034
Occupancy Sensors 0.3 672 3.2 6,935
High Efficiency LED Exits Signs 0.2 325 0.3 607
Timer Controls for Exterior Lights 0.7 1,582 2.9 6,285
CUMULATIVE EFFECT 9.1% $19,613 23.7% $51,320
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A Dime For A Dollar?
The cost of Cost Segregation Studies and other
tax incentive products can lead to tax savings of
10-15 times the cost!
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Thank You!
Any Questions?
Contact Info:
Joel E. Ackerman, CPA, MST
Director
200 Parkway Drive South
Suite 302
Hauppauge, NY 11788
Phone: 631-870-3920