This deduction can provide significant economic benefit to the property owner. This means that the net book value of the asset is written off as a loss (i.e. These assets qualify for Bonus Depreciation.Ībandonment – When a property undergoes renovation, such as a relighting or new HVAC system, the old systems are abandoned for accounting purposes. With energy costs scheduled to DOUBLE in some areas over the next 5 years, you can see how important these savings areġ245/1250 – When a renovation is completed, some of the assets may be considered personal property by the IRS. Utility Rebated – Just the same way you get a rebate for buying a new energy efficient refrigerator, you are also entitled to rebates from the Utility for energy efficient lighting.Įnergy Savings – Simply put, a new lighting system can reduce the power usage by 50%. A 200,000 square foot warehouse will generate $120,000 in tax deductions when re-done properly. You have a certification completed and the benefits are a simple line item adjustment to your tax returns. What are the economic benefits for relighting?ĮPAct – The Energy Policy Act of 2005 provides for a Federal Tax Deduction of $0.60 per square foot for putting in energy efficient lighting and the associated controls. While Bubba, the lighting guy, may be excellent at replacing your ballast, he probably knows little to nothing about your tax situation. ETS also offers the following advice: consult your tax professional. We offer for your review, the list of major benefits, and how you can use them to save you money. Many of the economic benefits are realized through tax deductions and other tax strategies you should not rely on your lighting installer to help you navigate these tricky waters.
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The case examples at the end of this article will show you how much you can save.
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The decision is now one of how much money do you want to save and how you want to save it. The decision to relight or remodel a property is no longer one of aesthetics. Lighting accounts for over 70% of all retrofits and remodels, and the utility and other rebates can be substantial, especially when combined with the benefits of EPAct and the energy savings.