Energy Edge Solutions

IRS Provides Tax Incentives for Energy Efficiency

Taking steps to be more energy-efficient not only saves money on utilities, but also creates the potential to gain money in the form of tax incentives. While not a new program (the bill was passed by Congress as the Energy Policy Act of 2005), the incentives have changed for 2011. It is important to understand what these changes are and how they will affect any planned energy-saving upgrades for your business.

 

The Tax Incentives Assistance Project (TIAP) provides a wealth of information to guide both commercial and residential building owners through the incentives.

In a nutshell:

  • A tax deduction of up to $1.80 per square foot is available to owners or tenants (or designers, in the case of government-owned buildings) of new or existing commercial buildings that are constructed or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating and interior lighting energy cost of a building that meets ASHRAE Standard 90.1-2001.
  • The new residential energy efficient tax credit is a 10% credit, up to a maximum of $500.

 

There are many qualifying products and services, so it is essential to review the new regulations with your accountant to ensure you are able to take full advantage. TIAP also supplies several useful links on their website to help guide you in understanding the incentives.

 

While the incentives have been reduced from recent years, they still provide motivation for energy efficient upgrades if you’ve considered making renovations to your home or commercial building. Consider the short-term payoff as well as the long-term reductions in utility bills and yearly upkeep.

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