Federal Tax Benefits for Energy Efficient Construction and RenovationBOMA BoiseApril 20, 2006Ed WisniewskiDeputy Director CEE
About CEE • 501c(3) nonprofit organization • Funded by 79 members in 28 states and 2 provinces as well as government grants • Members direct more than $2 billion in efficiency program resource procurement -- over 90% of US ratepayer efficiency funding • Provides a forum for working together as a virtual industry (and with ENERGY STAR, other industries) Disclaimer: Presentation is for general information purposes. Consult with a professional tax advisor.
Acknowledgements David Goldstein Energy Program Director Natural Resources Defense Council Joseph Mikrut Partner Capitol Tax Partners, LLC Kyle Pitsor Vice President, Government Relations National Electrical Manufacturers Association
What’s EPACT and What’s In It For Me? • SECTION 1331 OF H.R. 6, (PUBLIC LAW 109-58) • Tax Deduction Provision for Energy- Efficient Commercial Building Property • Extra Financial Assistance
Building and Expenditure Type • Tax Deduction for Measures to Achieve 50% Savings Compared to ASHRAE 90.1-2001 Baseline. • Interior Lighting • Heating, Cooling, Ventilation, Hot Water Systems • Building Envelope
Deduction Available • Equal to the Cost of the EE Measure • Subject to a Cap of $1.80 per sq/ ft. • Allowed During the Year Property is Placed in Service • Current Law – 2006 and 2007 • Bill to Extend Additional 5 Years
Partial Deductions For Sub Systems • Up to $.60 per sq. ft. for Each of Three Subsystems • Interior Lighting (Interim Rules in Place) • Heating, cooling, ventilation, and hot water systems • Building Envelope
Lighting Partial Deduction • Sliding Scale Based Upon Lighting Power Density Reductions • Table 22.214.171.124 or 126.96.36.199 of ASHRAE/IESNA Standard 90.1 - 2001 • $.30 for 25 Percent Reduction • $.60 for 40 Percent Reduction • Control Requirements Must Be Met
Sample Measures • Compliance is similar to energy codes such as the IECC or ASHRAE 90.1. • Technologies that are credited include: • More efficient cooling and water heating equipment • Better controls than required by code • Reductions in losses from ducts and fans • Better insulation and windows • Reducing or eliminating simultaneous heating and cooling • More efficient luminaires, ballasts, and lamps, and selection of more efficient light sources
Additional Examples • Daylighting • Commissioning • CHP • Semi-Conditioned Spaces • Low-Pressure Duct Systems
Certification Requirements • Secretary of Treasury to Promulgate Regulations • Describe Methods to Calculate Energy and Power Costs • “Qualify” Software • Establish Requirements for “Certifiers” • Identify Verification Requirements
Beneficiary • Deduction for the Company that Owns the Property • For Public Buildings -- Provision to Allocate Deduction to Primary Designer of the Property
Resources for Potential Support • Idaho Power www.Idahopower.com • Northwest Energy Efficiency Alliance www.nwalliance.org • Commercial Building Tax Coalition www.efficientbuildings.org • American Society of Heating, Refrigerating and Air-Conditioning Engineers www.ashrae.org • New Buildings Institute www.newbuildings.org • US Department of Energy www.doe.gov • US Environmental Protection Agency www.epa.gov • BOMA Energy Efficiency Program www.boma.org/aboutboma/beep • Consortium for Energy Efficiency www.cee1.org
BOMA Training • BOMA Energy Efficiency Program (BEEP). BEEP is an operational excellence program designed to educate owners and managers about the financial and environmental benefits of improving energy efficiency. www.boma.org/aboutboma/beep
NW Alliance – Better Bricks • Resource for information and services to help architects, developers, builders and facilities managers incorporate energy efficiency into their building designs, construction plans and day-to-day maintenance operations. www.betterbricks.com
US EPA ENERGY STAR® • ENERGY STAR offers guidelines for energy management and improving energy efficiency • Includes online national energy performance rating system to benchmark energy performance • Provides no-cost training programs geared toward commercial real estate professions • Also includes an online directory of product and service providers
Possible Guidance on Meeting Advanced Energy Targets • New Buildings Institute (NBI) • Advanced Buildings™ Suite: • Benchmark™ • Benefits Guide • Reference Guide • Advanced Lighting Guidelines • These documents describe processes for designing with energy efficiency as well as architectural and engineering choices • Case Studies Available at: www.advancedbuildings.net
CBTD Coalition • Implementation requires promptly getting the regulatory rules right and to vigorously promote the provision. • NEMA has brought together a broad stakeholder coalition representing building owners, designers, manufacturers, distributors, installation contractors, efficiency advocates, and government to work together to ensure success.
CBTD Progress to Date • Routine Coalition meetings held with stakeholder associations • 40 organizations represented • Website devoted to the CBTD was launched in December 05 www.efficientbuildings.org • Communications plan developed -- CBTD clearinghouse • NEMA has prepared a tri-fold pocket guide to the deduction, which is on the NEMA website, www.nema.org
Working Together • Consortium for Energy Efficiency (www.cee1.org) members are working with private sector companies and trade associations to provide support to comply.
Contact information: • David B. Goldstein, Ph.D. Natural Resources Defense Council email@example.com • Joseph Mikrut Capitol Tax Partners firstname.lastname@example.org Kyle Pitsor National Electrical Manufacturers Association email@example.com Ed Wisniewski CEE firstname.lastname@example.org
MARK YOUR CALENDARS! Want more information on this topic? Plan to attend BOMA International’s North American Commercial Real Estate Congress and The Office Building Show where updates and additional education on the Energy Bill are planned! When: June 24-27 Where: Dallas, TX For more information visit: www.bomaconvention.org or call 202-326-6341.