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You might want to retrofit your existing building with energy efficient lighting, HVAC or upgrades to the building envelope in order to save money on energy costs, but youve first got to come up with the funding for those improvements. Do you provide the required capital or continue to face increased operating costs? The ROI on new, energy-efficient systems may be longer, but the equipment will perform more reliably while providing better working conditions and lowering energy costs along the way. Most business owners will assume that funding for energy efficient upgrades has to come from dipping into their equity in the facility, or from an outside funding source such as a bank loan.
Fortunately, there are alternative strategies that can be put into place to pay for energy efficiency projects by significantly lowering your tax burden. A cost segregation analysis identifies and reclassifies personal property assets to shorten the depreciation time for taxation purposes, which reduces current income tax obligations. Personal property assets include a buildings non-structural elements, exterior land improvements and indirect construction costs. Depreciation expense is accelerated and tax payments are decreased when an assets life is shortened, which frees up cash for investment in energy efficiency projects.
The benefits of a cost segregation study are retroactive, including buildings that have been purchased, constructed, expanded or remodeled since 1987. This allows taxpayers to recapture previously unrecognized depreciation, which increases cash flow in the current year.
Another tax benefit that can be applied to energy efficient construction or improvements is found in section 179D of the Energy Policy Act of 2005. 179D includes full and partial tax deductions for investments in energy efficient commercial buildings that are designed to increase the efficiency of energy-consuming functions. The deduction available is up to $.60 per square foot for lighting, HVAC and building envelope, creating potential for $1.80 per square foot if all three components qualify. These deductions are applicable to buildings that were either built or retrofitted after December 31, 2005. In order to qualify for the deduction, the taxpayer must receive a third party energy efficiency certification.
In addition, the issuance of Revenue Procedure 2011-14 will allow some taxpayers to claim the 179D deduction all the way back to January 1, 2006 without filing one single amended income tax return. Taxpayers who wish to take the deduction without amending any returns will file a Form 3115 (Application for Change in Accounting Method) and will get to take the entire catch up deduction on the return that is being filed. This means that a taxpayer could potentially claim deductions from 2006-2010 (or 2011) all on one return and significantly reduce their tax burden, if not eliminate it altogether, which goes a long way toward funding energy efficiency.
Instead of looking to outside sources or reducing your valuable equity to fund energy efficiency, look to your own building for the answers. Putting the right strategy into place can result in surprisingly significant savings and painless way to pay for your project.
Every residential architect knows that each home design requires a carefully planned kitchen, and every kitchen will need cabinets with lights. Countertop areas underneath display cabinets are very important. They serve both a decorative function as well as a practical purpose. Shadows underneath cabinets are both unattractive, and they can also make working with knives and other kitchen implements unsafe if visibility is obscured too much.
It is necessary for the architect to plan ahead to eliminate these dark areas with kitchen undercabinet lights that will fulfill both the functional and aesthetic demands of kitchen design. Architects should consider fixtures more sophisticated than generic puck lights and outdated fluorescent lights once promoted as energy savers.
When it comes to installing kitchen undercabinet lighting, it works to the benefit of all parties involved in the home building market to use the most robust engineering and undercabinet lighting manufacturing design available. This will combine the intentions of an artist with the precision of a scientist.
Cabinet lighting strips are now much smaller than the generic types of competing fixtures available to architects and builders. They are easy to conceal beneath the forward undersurface of even the most ornate and custom cabinetry. Special glare shields in the linear strips direct the light backward away from the eyes. This minimizes reflective glare and creates a more even distribution of light under the kitchen cabinet. Dimmer controls allow the homeowner to make further adjustments, literally fine tuning illumination over countertops to match that of general lighting in the room. This makes for superior aesthetic qualities and more comfortable environment for food preparation, parties, and other special hosted gatherings.
New custom kitchen undercabinet light fixtures use LED bulbs to generate color temperatures capable of aesthetically complimenting the wide range of granite and marble countertops frequently found in custom home kitchens. A newly introduced 2800K led festoon has been specifically designed to mimic xenon as a compliment to the warmest of color tones and backsplashes. LED lamps at 2950K are designed to emulate warm white lighting common in more contemporary style kitchens.
The energy saving value of LED technology cannot be emphasized enough. LED undercabinet lights are 60 percent more energy efficient than xenon equivalents, and the staggering lamp life of up to 50,000 bulb hours makes replacements very rare. If a replacement is necessary, a single festoon lamp can be purchased to replace the one that has failed. It is never necessary to purchase a new undercabinet lighting fixture when you design your kitchen lighting with festoon based LED lighting strips.
LED kitchen undercabinet lights also help contribute to reduced cooling costs. Many people prefer to leave these lights on to provide low level night lighting in the kitchen. A hot burning light source will trigger the thermostat to activate the HVAC system, driving up power bills in the process. However, LED bulbs are cool light sources that produce luminance through an electrical current rather than the ignition of a contained gas. The forward throw heat is so negligible it has no impact on room temperature readings.
For applications that specifically call for an architect to use kitchen cabinet or undercabinet lighting in the cooler 5000K color temperature range, LED Festoon lamps are now available. The cooler color temperature lamps also provide higher lumen output, thus brighter light.
As lighting technology continues to advance, more exciting choices are becoming available to enhance the beauty and energy efficiency of homes worldwide.
Home energy assessment refers to the process of inspection, survey and estimation of the flow of energy in a particular building. This activity is carried out with the intent to reduce the amount of energy consumed in a building. Special emphasis is given to the fact that the resultant solution does not cause any negative effect on the output energy.
The process of energy audit is done by a professional, who surveys the heating, ventilation and air-conditioning or HVAC system of a residence. Advanced equipment like infrared cameras and blower doors are utilized to determine the appropriate solution for an effective heating and cooling of the house. Such services can be easily availed from an expert heating contractor. Their professionals carry out a thorough inspection of the entire building, beginning with the walls, ceilings & floors to doors, windows and skylights. While carrying out the process of surveying, all the places of leakage and points of infiltration of air are taken into consideration. The audit also takes into account the physical condition and efficiency of the various mechanical systems of the house. These may include the heating, air conditioning and ventilation equipment.
The assessment is made while keeping in mind factors like the local climate, roof overhang, solar orientation and the energy consumption of the house like electricity, natural gas or other energy sources. Apart from surveying the heating, cooling and ventilation systems of a premise, there are other factors that these experts take into account. These include the size of the premise where the system is to be installed, the age of the building and the renovation done to the same. Size of the premise matters a lot, as a large air conditioner will be unable to efficiently dehumidify the air, whereas a small HVAC system will be ineffective in creating comfortable conditions inside the premises. Based on such findings a heating contractor suggests remedial solutions to improve the energy consumption of the building, without making a compromise on the energy output.
The solutions offered by these experts also include Westchester heating services like furnace installation, boilers, radiant flooring, heat pumps and hybrid heat systems & geothermal systems. The cooling solutions, on the other hand, include installation of efficient and effective central air conditioning system together with cooling equipment. Maintenance and load calculations also form a part of the cooling solutions. Additionally, the cooling solutions are constituted by air filtration & humidification service and the ultraviolet light system.
The 179D tax deduction came about as part of the Energy Policy Act of 2005 (EPAct). Congress wanted to incentivize the utilization of energy-efficiency components in a building to one of the following parties:
1.The owner of the building
3.The primary designer of an energy-efficient government building. (Architect, engineer, contractor etc.)
The deduction available is up to $.60 per sq./ft. for lighting, HVAC and building envelope, creating potential for $1.80 per sq./ft. if all three components qualify. These deductions are applicable to buildings that were either built or retrofitted after 12/31/2005.
Since EPAct came into effect, the IRS has provided interim guidance on EPAct deductions through several additional notices. IRS Notice 2006-52 describes in detail the rules and how to ensure a building qualifies if it was a new build or a retrofit. It requires the taxpayer to obtain certification that the property satisfies the energy efficiency requirements of 179D and specifies the software that must be used to calculate energy and power consumption. To further the cause, the IRS issued Notice 2008-40, which allowed a government building (non-taxpaying entity) to pass the deduction to the “primary designer” of the qualifying assets.
Until recently, taxpayers looking to claim the 179D deduction were limited by the three year statute of limitations for filing amended income tax returns for a particular tax year. That has changed with the issuance of Revenue Procedure 2011-14, which will allow some taxpayers to bypass this statute of limitations and claim this deduction all the way back to 1/1/2006 without filing one single amended income tax return. Taxpayers who wish to take the deduction without amending any returns will file a Form 3115 (Application for Change in Accounting Method) and will get to take the entire “catch up” deduction on the return that is being filed. This means that a taxpayer could potentially claim deductions from 2006-2010 (or 2011) all on one return and significantly reduce their tax burden, if not eliminate it altogether.
Deciding whether or not to amend returns or file for a Change in Accounting Method (Form 3115) is entirely dependent upon each taxpayers situation. If taxable income was higher in open years and therefore the taxpayer was in a higher tax bracket, it still may make sense to amend those returns. The impact of Revenue Procedure 2011-14 will also depend on whether or not any deductions have already been claimed or returns have been amended. A thorough analysis of each taxpayers scenario by an advisor experienced in 179D is advantageous to determining the best approach and claiming the maximum deduction allowed under the law.
Heating and cooling bills account for over half of the monthly expenditure of American homeowners, when talking simply about fees associated with home ownership. This stems from a variety of causes, from the windows to poor insulation. The result is a home with an overactive HVAC system, drafts and other similar issues. Additionally, homeowners increase their carbon footprint due to the abundant use of energy to heat their home. Carbon dioxide, nitrous oxide and methane are expended with your HVAC system, which are attributed to global warming. Insulation can block some of these emissions, while reducing your electrical use can lower the rate of greenhouse gases as well. There are many ways that home owners can combat their energy use, so its important to create a budget to determine what you can afford and what will help your energy use the most in the long term. It can be expensive to make these changes to your home, but improving the energy efficiency in your home will not only reduce monthly expenditures, but increase the resale value of your home.
Windows and Doors
One of the biggest places that energy escapes is from the windows and doors, so its important to verify their status. If you live in an older house, chances are that the materials used during the building process are out of date and may simply require an upgrade. Look around the jamb and windowsill to determine whether the caulking may need a repair or inspect wooden frames for any warping, chips or other, more significant damage. Caulking is easy to repair, but more serious signs like condensation, frost on the inside of the windows and chips in the wood are more serious physical signs that you need new windows. Doors have a clearer cut sign; when you close the door if you can see any light coming from the outside into your home, its time to replace the door. Its either become damaged during its years of use or it was uninstalled properly. Lastly, if these items seem visually alright, you may simply want to feel the temperature near the questionable windows. For example, a window that feels frigid to stand in front of during the winter months is not energy efficient. And when that happens, an abundance of your homes energy is lost through these spaces.
Every appliance that you own should be equipped with an energy-efficient tag or it needs to be replaced. Older models may be sturdy and reliable, but without the certification you may be spending too much on your energy bill. Its also important to unplug items like the toaster or your computer, when they are not in use. These items can increase your bills for no reason when they are plugged intot the wall. Its also important to not leave the refrigerator open for long periods of time, which make the air escape and the appliance work harder. Lastly, dont run the dishwasher until it is full, instead of just doing it one load at a time.
One of the biggest places to lose energy is inefficient insulation. When properly installed, installation acts like a barrier between your home and the sun, keeping it cool in the summer. And during the winter months, it safely keeps the warmth inside your home. The result is a home with a constant, comfortable temperature. Talk with a professional insulation team to determine whether your home qualifies for an upgrade.