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Energy Efficient Incentive Programs for Corporations

By Daniel Stouffer

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Published: 17Feb2010
Word count: 406
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Government incentives for energy efficient programs have risen due to the ongoing drive in reducing traditional energy use and greenhouse gas emissions. These incentives are very helpful in improving building efficiency, procure 'clean' vehicles, put in place on-site energy sources, and install combined power and heat systems.

Buildings which are occupied between 2006 and 2013 that would undergo steps to reduce energy costs in building envelope, heating, water heating, cooling, and lighting systems can avail of tax deduction.

This energy efficient incentive has very stringent requirements and specifies that a minimum of 50% or more of the annual projected energy costs across those components must be met before tax deduction. Tax deduction will be at $1.80 per square foot. There is lesser deduction for operators and building owners who save according to individual component than combined. Combined heat and power is a new initiative with energy-efficient incentive for owners that install a system until the end of 2016. Upon its full operation, a 10% investment tax credit may be taken which is applicable to the first 15MW of property owned.

There are detailed qualifications to avail of this energy efficient incentive program. Basically, the system must be 60% efficient, with a production of at least 20% as electricity and 20% as thermal energy. Any qualifying business may take a grant within 2009 or 2010 instead of the tax credit.

Energy-efficient incentive tax credits are available for buyers of heavy-duty hybrid vehicles which range up to a total of $12,000 for large vehicle that's over 26,000 pounds. These incentives include passenger vehicles and commercial products.

In lieu of the investment tax credit, business owners who implement renewable generation alternatives can take a form of grant from the US Treasury within 2009 or 2010. These are worth up to 30% of the system's installation cost. These installations may include wind-based, geothermal heat pump based, or solar based.

To be eligible for the grant, solar systems should be able to generate electricity or cool or heat supplied water or illuminate a room with the use of sunlight distributed through fiber-optic. Wind turbines will be eligible for a 30% incentive against tax liability if these are not more than 100kW of 'nameplate capacity.

Aside from those mentioned, there are more additional energy efficient incentive schemes that are available for companies. These incentives are related to the 'economic stimulus legislation' which is the initiative of the Obama administration. For the full details of the options available for your business, you may check with your tax and financial advisers.

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