INDUSTRY NEWS

 

President George Bush signs

Energy Act of 2005

 

 

WHAT IS THE ENERGY POLICY ACT OF 2005?

 

The Energy Policy Act of 2005, which was passed by Congress in July 2005 and signed into law by President George W. Bush on August 8, 2005, is the first major energy legislation passed by Congress in 13 years (since the original Energy Policy Act of 1992).  The complex new law 1,725 pages in length deals with the supply, delivery and use of fossil fuels (natural gas, coal and oil), nuclear power and renewable energy.  It also promotes energy efficiency, helps low-income families who are hard-hit by rising energy prices and promotes energy market reforms, such as stiffer penalties for misconduct.

 

The Energy Policy Act has a number of provisions related to natural gas, which is a clean, efficient form of energy found in abundance throughout North America. 

TAX DEDUCTIONS FOR COMMERCIAL BUILDINGS

Under EPAct 2005, you can take advantage of tax deductions of up to $1.80 per square foot for the certified use of qualifying energy-efficient technologies in both new construction or renovation applications.

These deductions reward the use of specific energy-efficient lighting and building envelope products that increase a building's energy efficiency by 25-40% compared to the ASHRAE 90.1-2001 standard. This benchmark was established in 2001 by the American Society of Heating, Refrigeration, and Air Conditioning Engineers to measure the watts per square foot used by various systems in commercial buildings. Because this standard was established before many newer, energy-efficient technologies became available, it can be relatively easy to qualify for EPAct 2005 tax deductions.

  • Lighting, HVAC/hot water systems, and other building envelope products help a building qualify for this tax deduction.

  • A one-time, whole building tax deduction of up to $1.80 per square foot is available for a lighting, HVAC/hot water, and building envelope upgrade

  • A partial $0.60 tax deduction is available for an upgrade of any one system (lighting, HVAC, and building envelope products) that surpass the ASHRAE 90.1-2001 standard by 25-40%.

  • These tax deductions are available for all property placed in service between January 1, 2006 and December 31, 2007.

EFFICIENCY STANDARDS FOR LIGHTING

New efficiency standards created by EPAct 2005 go into effect January 1, 2006, and will include:

  • Illuminated exit signs, torchiere fixtures, traffic signals, pedestrian crosswalk modules, and medium screw-base compact fluorescent lamps. The standards will apply to these products manufactured Products manufactured on or after January 1, 2006.
  • Energy-saving magnetic fluorescent ballasts. Standards apply to ballasts manufactured on or after January 1, 2009, sold by a manufacturer on or after October 1, 2009, or incorporated into a luminaire on or after July 1, 2010.
  • Mercury vapor lamp ballasts. EPAct's guidelines state that mercury vapor lamp ballasts cannot be manufactured or imported after January 1, 2008.

 

HOW DO I TAKE ADVANTAGE OF THIS TAX INCENTIVE?

While this may seem confusing, we can help you every step of the way.  Energy Solutions will provide all of the pertinent information for your accountants to take the proper deductions under the guidelines.

ENERGY SOLUTIONS WILL BE WITH YOU EVERY STEP OF THE WAY TO ENSURE YOU FOLLOW THE GUIDELINES AND TAKE THE PROPER TAX DEDUCTIONS

Please contact us for an Free Energy Audit, which will include the Energy Policy Act of 2005 Tax Deductions.

 

 

To Schedule your comprehensive FREE ENERGY AUDIT:

 

 

Thanks to Advance Transformer Company and Philips Lighting Company for their information on EPACT 2005.