ENERGYTAX ADVANTAGES

INCENTIVES

REBATES

INCENTIVES:CREDITS – DEDUCTIONS - REBATES

INCENTIVE: Any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to alternatives.

REBATE: An amount paid by way of reduction, return, or refund on what has already been paid or contributed.

CREDIT (TAXATION): A reduction of taxes – dollar for dollar.

DEDUCTION: Reduces taxes by the percentage fixed for the taxpayer's income bracket

ARIZONA INCENTIVES

• Combination of :

• Incentives

• Credits

• Deductions

• ….participates in Federal Programs

ARIZONA INCENTIVES Corporate Tax Credit

Non-Residential Solar & Wind Tax Credit   Green Building Incentive

Chandler - Fee reimbursement for LEED Cert Scottsdale – Expedited plan review

Buckeye – Expedited plan review, free construction H20 passes (Aqua Ctr) GR COTucson – Solar credit $1000

  Personal Deduction Energy Efficient ResidencesQualifying Wood Stove Deduction

  Personal Tax Credit Non residential Solar & Wind Tax CreditsResidential Solar & Wind Energy Systems

  Property Tax Assessment Property Tax Assessment for Renewable Energy Property

  Property Tax Exemption Solar Energy Property Tax Exemption

  Sales Tax Exemption Solar & Wind Equipment Sales Tax Exemption

ARIZONA INCENTIVES• • Utility Loan Program

APS - GEOSmart Financing ProgramSulphur Springs Valley EC - Member Loan ProgramSulphur Springs Valley EC - SunWatts Loan Program

• Utility Rebate Program APS - Energy Efficiency Solutions for BusinessAPS - Energy Efficient AC Rebate ProgramAPS - Renewable Incentive ProgramSRP - EarthWise Solar EnergySRP - PowerWise Business Solutions Energy Efficiency Rebate ProgramSulphur Springs Valley EC - Residential Energy Efficiency RebateSulphur Springs Valley EC - SunWatts Rebate ProgramTEP - Commerical Energy Efficiency Rebate ProgramTEP - Renewable Energy Credit Purchase ProgramTEP - Residential Energy Efficiency Rebate ProgramTrico Electric Cooperative - SunWatts Incentive ProgramUES - Commercial Energy Efficiency Rebate ProgramUES - Energy Smart Homes Program

FEDERAL INCENTIVES: CREDITS OR DEDUCTIONS

- Energy Efficient Commercial Buildings Tax Deduction - Energy Efficient New Homes Tax Credit for Home Builders - Modified Accelerated Cost Recovery System (MACRS) + BonusBusiness Energy Investment Tax Credit (ITC) - Qualified Energy Conservation BondsQualifying Advanced Energy Project Investment Tax Credit Renewable Electricity Production Tax Credit (PTC) Renewable Energy Production Incentive (REPI) - Tribal Energy Program GrantResidential Energy Conservation Subsidy Exclusion (Corp) Residential Energy Conservation Subsidy Exclusion (personal) Residential Energy Efficiency Tax Credit - US DOE – Loan Guarantee ProgramResidential Renewable Energy Tax Credit - Clean Renewable Energy Bonds (CREBS)Energy Efficient Appliance Tax Credit for Manufacturers - Energy Efficient MortgagesFederal Appliance Standards - US Dept of Treasury – Renewable Energy GrantsUS Federal Government – Green Power Purchasing Goals USDA – Rural Energy for America Program Grants (REAP) USDA – Rural Energy for America Program Loan Guarantees (REAP)

Energy Goals and Standards for Federal Buildings Energy Reduction Goals for Federal Agencies

• Interconnection Standards for Small Generators

FEDERAL OPPORTUNITIES

Energy Efficient Commercial Buildings Tax Deduction (for taxpayer and primary designer)

Energy Efficient New Homes Tax Credit for Home Builders (both site built and manufactured)

Renewable Credits (ITC)

Modified Accelerated Cost Recovery System (MACRS) + Bonus

FEDERAL CREDITS: ITCSolar: Water Heater

Space Heater

Thermal Electric

Thermal Process Heat

Solar Hybrid Lighting

Photovoltaics (PV)

Geothermal: Electric

Heat Pumps

Direct Use

Fuel Cells

Wind

Biomass

CHP/Cogeneration

Microturbines

FEDERAL CREDITS: ITCCommercial, Industrial, Utilities

• SOLAR: 30% of costs – NO CAP

• FUEL CELLS: 30% of costs – NO CAP ($1500/.5KWh)

• SMALL WIND TURBINES: 30% of costs – NO CAP (<100kW)

• GEOTHERMAL SYSTEMS: 10% of costs NO CAP

• MICROTURBINES: 10% OF COSTS – $200/Kw of capacity

• CHP: 10% of costs –

COMMERCIAL BUILDINGSEPACT 2005TAX DEDUCTION Section 179D

COMMERCIAL BUILDINGSSection 179D

• Deduction = up to $1.80/sq ft for reduction of total energy use by 50% (whole building)

• Partial Deduction of $.60/sq ft for 16 2/3 energy reduction for any one of the three systems

• Energy modeling required

• New construction, retrofits

COMMERCIAL BUILDINGSSection 179D

• INTERIM RULE: LIGHTING

• Watts per square foot• Space by space approach• BI-LEVEL SWITCHING MANDATORY

• EXCLUSIONS: – Lobbies, guest rooms, rest rooms, storerooms

COMMERCIAL BUILDINGSSection 179D INTERIM LIGHTING RULE

From $.030/sq ft for exceeding ASHRAE90.1 2001 by 25%

From $.060/sq ft for exceeding ASHRAE90.1 2001 by 40%

Exception: Warehouses MUST exceed by 50% ASHRAE 90.1 2001

COMMERCIAL BUILDINGSSection 179D

PUBLIC – GOVERNMENT BUILDINGS:

“Primary Designer” may qualify for the deduction benefits (one who creates the technical specifications)

COMMERCIAL BUILDINGSSection 179D

• CERTIFICATION FOR SECTION 179D

• Third – party certification• Party “not-related” to taxpayer• Approved software (by IRS) required• Deduction may be taken for projects from 1.1.06

through 12.31.13

HOME BUILDER CREDIT

• $1000 to $2000

• SITE BUILT AND MANUFACTURED HOMES

• Homes completed post August 8, 2005 – purchased after December 31, 2005 and prior to

• January 1, 2009

HOME BUILDER CREDIT

$1,000 to $2,000 CREDIT

• Qualification:– Built in the US– Construction “substantially” completed post

8.8.2005– Meets statutory energy savings requirements– Acquired from the eligible contractor after

12.31.2005 and prior to 1.1.2008 – for use as a residence

HOME BUILDER CREDIT

• SITE BUILT = 50% energy reduction $2,000 (International Energy Conservation Code Standard)

• MANUFACTURED HOME = $1,000 - $2,000

• 30% to 50% energy reduction

• Must receive certification

DEPRECIATIONModified Accelerated Cost Recovery System (MACRS) + Bonus

• How to get the Feds to underwrite an energy efficiency project

• Modify asset classification to “catch up” missed depreciation

• Bonus of 50% on “NEW” assets

DEPRECIATION• Depreciation is about “useful life”• IRS has it’s own rules about “useful life”

Commercial property = 39 years

Commercial residential – 27.5 years

“Real Property” vs. “Tangible Personal Property”

39 year assets (27.5)

15 year assets

5 year assets

RECLASSIFICATION

IRS OPTIONS

• “Catch up” missed “Catch up” missed depreciation:

– Existing/owned property (since 1992)

• Start with correct depreciation:– New construction or acquisition

– Remodels/retrofits/additions

“BONUS” DEPRECIATION

• Assets, 2008 & 2009

• 50% “Bonus” on “NEW” assets

• Combine Section 179 with “Bonus” (expense + bonus)

INFORMATION

• Difficulty in keeping up with new federal and state opportunities

• Approximately 60 new initiatives monthly

ESSENTIAL WEB SITES

www.energy.gov - Department of Energy

www.energystar.gov – Variety of discussion residential & comm

www.epa.gov/greenbuilding - Discussions of sustainability

www.irs.gov – Tax info: Notice 2006-52/N2008-40/IRB2008-14

www.dsireusa.org – All states and federal incentives

www.ashrae.org – All Standards

www.aceee.org – American Council for an Energy Efficient Economy

www.energytaxincentives.org – Tax Incentives Assist Project (TIAP)

www.usgbc.org – Leed & sustainability

www.greenbuildings.com – Principally residential

THANK YOU!

Marky Moore, LEED APPresident

CAPITAL REVIEW GROUP

602 741.7776 – Direct

markym@capitalreviewgroup.com