You’ve probably heard proponents pushing the case for everything green — from organic cosmetics to energy-efficient home construction to new jobs. Even the Obama administration has jumped head-first into supporting green initiatives that it says will save the country billions of dollars, create less dependence on foreign oil, and generate opportunities in various industries.
But how does this affect your bottom line?
There are several incentives, from tax breaks to rebates, that make going green an attractive option for both entrepreneurs and consumers.
Savings for Consumers
Tax Incentives: Because of the American Recovery and Reinvestment Act (ARRA), the federal income tax credits for specific home improvements are available through 2010. Homeowners can lower home energy bills, lower federal income taxes, and increase home comfort by making energy efficiency home improvements that qualify for up to $1,500 in federal income tax credits.
“The ARRA tax credits are potentially worth three times as much as the 2006-07 tax credits, at up to $1,500,†said Kateri Callahan, president of the Alliance to Save Energy. “This more generous dollar amount puts energy- and money-saving home improvements within reach for more American homeowners. And the longer time frame, through 2010, gives homeowners more than a year to plan and budget.â€
Applicable home improvements include installing window sealing and energy-efficient air conditioners and heat pumps.
The Tax Incentive Assistance Project (TIAP), which is sponsored by a group of nonprofits, government agencies, and other organizations in the energy efficiency field, provides specifics on products and equipment that qualify for the 2009-2010 federal tax credits via its Website.
Your purchases can also save you money. For the first time in the 2009 model year, certain light-duty diesel vehicles qualify for tax credits as lean-burn vehicles, including Audi, BMW, Mercedes Benz and Volkswagen models, up to $1,800. And purchasers of hybrids, such as the 2009 Nissan Altima Hybrid, can quality for credits, up to $3,000 for qualifying models. For a listing of other qualifying models, visit IRS.gov.
Product and Appliance Rebates: On July 16, Energy Secretary Steven Chu announced the availability of nearly $300 million in funding from the recovery act for state-run rebate programs for purchases of new home appliances qualified by Energy Star, a government-backed program that sets the international standard for energy-efficient consumer products.
The new funding will be awarded to states and territories through their energy offices. Each state or territory is required to submit a plan that specifies the Energy Star appliance categories to be included, the rebate level for each product type, the processing of rebates, and their plan for recycling old appliances. The deadline for state applications is October 2009.
In the meanwhile, many companies already offer rebates for energy-efficient appliances and products purchases. For example, Gladiator GarageWorks offers rebates and other savings on products including an Energy Star-qualified refrigerator with a discount of $150 and free shipping, and a garbage compactor discounted $75, with free shipping.
For more information on product rebates and savings, visit Energy Star’s rebate locator Webpage.
Savings for Builders, Developers, Entrepreneurs
Tax Incentives: “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,†says Steve Nadel, executive director of the American Council for an Energy-Efficient Economy (ACEEE), a nonprofit organization that promotes energy efficiency.The tax incentives for building with energy efficiency can apply across the board, from lighting to heating and cooling. For instance, buildings which save at least 50% of projected annual energy costs across all three system components, including lighting system, building envelope (which includes the interior and the exterior environments of a building), and heating, cooling, and water-heating equipment, are eligible for a tax deduction of up to $1.80 per square foot.
Also, builders of new homes manufactured through Dec. 31 that exceed national model energy codes by 50%, subject to certification, are eligible for a $2,000 federal tax credit. The credit is available for 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.
Manufactured home producers that exceed national model codes by 30% or qualify for the federal Energy Star Homes program are eligible for a $1,000 credit.
For more information on applicable building standards and certification, visit TIAP’s Website.
Appliances and Products: Also, installing energy efficient appliances and equipment at your office or facility can save costs at a time when budgets are tight. For example, according to Energy Star, a business can save approximately $30 in costs over
the life of an Energy Star-qualified compact florescent light bulb (CFL) and use 75% less energy by replacing standard incandescent bulbs. Qualified refrigerators and freezers can save more than 45% of the energy used by conventional models, which equals as much as $140 annually for refrigerators and $100 for freezers.For more information on product and appliance savings, visit Energy Star’s Website.
Rebates and Savings Programs: There are several programs across the nation that offer incentives such as rebates on energy-efficient appliances and products purchased to replace old products. For example, San Diego Gas & Electric, a California-based energy services company, offers a Small Business Super Saver Program which provides cash rebates to eligible small businesses for energy-efficient upgrades such as lighting, refrigeration, food service, natural gas, and other technologies.
For a listing of similar programs in your state, visit the Database of State Incentives for Renewables & Efficiency (DSIRE) Website.
Resources
Department of Energy Incentives Resources
Energy Incentives for Builders and Developers
Rebates and Other Incentives by State
Checklist Guide to Home Energy Savings
Energy Star Consumer Tax Credit Resources