Energy Efficient Incentive Programs For Corporations

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.

As this incentive for energy efficiency would have very strict requirements, components must be met before tax deduction such as cutting down at least 50% of the annual projected energy costs. Tax deduction will be at $1.80 per square foot. Lesser deductions will be given to building owners and operators who save on individual components as opposed to that which is 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.

To avail of this incentive program for energy efficiency, there are very detailed qualifications. To be 60% efficient, the system must produce at least 20% thermal energy and 20% as electricity. Any qualifying business may take a grant within 2009 or 2010 instead of the tax credit.

Companies that buy heavy-duty hybrid vehicles ranging up to $12,000 for a vehicle over 26,000 lbs will benefit from energy-efficient incentive tax credits. 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. Such installations could include solar based, geothermal heat pump based, or wind-based.

Solar systems should be capable of generating cool or heat supplied water or electricity or light up a room through the use of energy from sunlight in order to be eligible for the grant. To benefit from 30% incentive that will be deductible against tax liability, companies can install wind turbines which 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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