Restoration logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Restoration logo
  • NEWS
  • PRODUCTS
    • New Products & Technologies
    • Submit Your Product
    • Interactive Product Spotlights
  • EDUCATION
    • KnowHow.
    • Podcasts
    • Trade Shows & Expos
    • Training & Certification
    • Webinars
    • Whitepapers
  • TOPICS
    • Water Damage
    • Fire & Smoke Damage
    • Mold
    • Contamination
    • Odor
    • Contents
    • Architecture
    • Catastrophe
    • Cleaning
  • BUSINESS
    • Managing Your Business
    • Insurance/Legal Matters
  • BUYER'S GUIDE
  • VIDEOS
    • Ask Annissa
    • Ask the Expert
    • Ironclad Marketing Minute
    • TradeTalks
    • Video Channel
  • INFOCENTER
    • Mold and Mycotoxins
  • THE EXPERIENCE
    • Conference & Exhibition
    • Convention & Trade Show
    • R&R Special Issue
  • EMAG
    • eMagazine
    • Archive Issues
    • Contact
    • Advertise
  • SIGN UP

Businesses, Builders, Others Can Lower Federal Taxes with Energy-Efficiency

June 7, 2009

Washington, D.C., June 2009 – Business owners, residential and commercial property builders, and commercial building owners and tenants who increase the energy efficiency of their properties can enjoy lower federal income tax bills, advises the Tax Incentives Assistance Project (TIAP), a coalition of public interest nonprofit organizations, government agencies, and other entities that promote energy-efficiency.

Federal tax breaks also are available to manufacturers of energy-efficient clothes washers, refrigerators, and dishwashers, as is a 10 percent investment tax credit for combined heat and power (CHP) properties with systems smaller than 50 megawatts (MW).

The duration of each of these tax incentives varies and can be found, along with other pertinent information, on the TIAP website at www.energytaxincentives.org.

“The federal tax incentives are a critical key to improving the efficiency of the largest energy-using sector of our economy – buildings – which account for roughly 40 percent of total U.S. energy use and carbon emissions,” noted Kateri Callahan, president of the Alliance to Save Energy, a TIAP founding partner.

Steve Nadel, executive director of the American Council for an Energy-Efficient Economy (ACEEE), also a TIAP founder, commented, “Now is the time to act on energy-efficiency investments.  These federal tax incentives will help businesses reduce their operating costs and improve their bottom line while also cutting carbon emissions to stabilize our climate.”

Commercial Buildings
Businesses can take a tax deduction for new or renovated buildings by reducing the energy costs associated with three components – the lighting system, the building envelope, and the heating, cooling, and water-heating equipment.  To qualify for the deduction, buildings must meet the ASHRAE 90.1-2001 standard and must be placed in service (be ready and available for use) by December 31, 2013.

The organization that makes the expenditures is generally the recipient of the deduction, which can be taken in the year the building is placed in service.  In the case of a public building, the designer may take the deduction. The building must be certified by a qualified individual (a licensed engineer or contractor) as meeting the energy cost savings goal.

The deduction is available at three levels:
  • Buildings that save at least 50 percent of projected annual energy costs across all three system components are eligible for a tax deduction of $1.80 per square foot.
  • Buildings that save a specified percentage of projected annual energy costs for one of the three components – building envelope (10 percent whole building energy savings), lighting (20 percent), or heating and cooling (20 percent) – are eligible for a $0.60 per square foot deduction.   
  • For lighting improvements that reduce lighting use by 25-40 percent and also employ dual switching (ability to switch roughly half the lights off and still have fairly uniform light distribution), the $0.60 per square foot may be prorated, ranging from $0.30 per square foot for 25 percent lighting energy savings to $0.60 per square foot for 40 percent savings.
New Homes
Builders of new homes placed in service through December 31, 2009, that exceed national model energy codes by 50 percent, subject to certification, are eligible for a $2,000 federal tax credit.  The credit is available for homes (including both site-built and manufactured homes) projected to save at least half of the heating and cooling energy of a comparable home that meets the standards of the 2003 International Energy Conservation Code, including supplements.

Manufactured home producers that exceed national model codes by 30 percent or qualify for the federal ENERGY STAR Homes program are eligible for a $1,000 credit.

Qualifying homes feature a range of innovative design and construction methods that increase energy efficiency, including better-insulated foundations, walls, and ceilings; high-efficiency windows; well-sealed framing and air ducts; high-efficiency heating and cooling systems; and other innovative design and construction methods.

Combined Heat and Power
Owners of combined heat and power (CHP) systems smaller than 50 MW may take advantage of a 10 percent investment tax credit for the first 15 megawatts of CHP property placed into service through December 31, 2016. To qualify, a CHP system must be 60 percent efficient and produce at least 20 percent of its useful energy as electricity and at least another 20 percent as useful thermal energy.

An investment tax credit is a reduction in either overall individual or overall business tax liabilities and may also be applied to the alternative minimum tax.  CHP system owners/users cannot take the credit until the year that the system is operational; and only the original constructor or user of the CHP property may take the tax credit.

This year’s economic stimulus legislation also provides the option for businesses to take a grant from the U.S. Treasury Department during 2009 and 2010 in lieu of the investment tax credit.   For more information on CHP, see http://aceee.org/chp.

“Combining the CHP credit with other federal or state energy credits may reduce the amount of one of more of the credits,” Nadel noted.  “The IRS provides formulas for understanding the impact of these other ‘subsidized energy financing’ mechanisms.  TIAP advises taxpayers to consult a tax professional for more information.”

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Recommended Content

JOIN TODAY
To unlock your recommendations.

Already have an account? Sign In

  • mold remediation

    Fighting Mold and Bacteria Damage

    Successful mold remediation can be multidisciplinary,...
    Mold Remediation
    By: Josh Woolen
  • certifications and licenses for restoration professionals

    Certifications and Licenses Every Restoration Company Needs

    Restoration companies need to make sure they have the...
    Restoration Training/Education
    By: Sharon Elzarat
  • a wall covered in moss and fungus

    Zero Tolerance for Toxic Molds: Essential Steps for Successful Remediation

    Understanding the importance of zero tolerance for toxic...
    Mold Remediation
    By: Michael A. Pinto CSP, SMS, CMP, RTPE, FLS, ERS and Kendra Seymour
You must login or register in order to post a comment.

Report Abusive Comment

Manage My Account
  • eNewsletter
  • Online Registration
  • Subscription Customer Service
  • Manage My Preferences

More Videos

Popular Stories

Pop Art Female Superhero Punches a Masked Villain

TPAs vs. Independence: The Restoration Industry’s Own Version of the Cola Wars

RIA Carrier Advocate Mark Springer

Turning the Page: A New Era of Trust and Collaboration in Restoration

particle count hands-on demonstration of a HEPA filter

The Truth About HEPA Filters

Submit Your New Product/Technology to R&R!

Would you like to promote a new restoration, remediation or cleaning product/technology with Restoration & Remediation? Fill out the question below to start your submission:

Events

September 3, 2025

The Experience Convention and Trade Show

The Experience Convention & Trade Show logoJoin us in Las Vegas for The Experience Convention & Trade Show, the leading event for cleaning, restoration, and remediation pros, packed with hands-on demos, expert speakers, and high-impact networking. Happening September 3–5, 2025 at Caesars Forum—this is where the industry comes to learn, connect, and grow!

View All Submit An Event

Poll

Doffing PPE

When you are doffing your PPE, do you sanitize between every step?
View Results Poll Archive

Products

The Cleaning, Restoration, Inspection, and Safety Glossary

The Cleaning, Restoration, Inspection, and Safety Glossary

The Cleaning, Restoration, Inspection, and Safety Glossary.

See More Products
Prepare for CATASTROPHE with R&R!

Related Articles

  • Nansulate coating for building energy efficiency

    See More
  • IR ep 19

    Leading Yourself Before You Can Lead Others

    See More
  • Fluke shows how facilities managers can boost efficiency and save money

    See More

Related Products

See More Products
  • GET-PAID-NEW-COVER-1.gif

    Get Paid! (ebook)

See More Products
×

Stay ahead of the curve with our eNewsletters.

Get the latest industry updates tailored your way.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
    • Submit a Press Release
  • SIGN UP TODAY
    • Create Account
    • eNewsletters
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Reprints
    • Marketing Services
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing