the-economistWhy are Americans so slow to trust cost-efficient, energy saving technology and the tax incentives that reward them?

Some startling facts about missed opportunities regarding global energy-saving efforts were uncovered in a recent online article, Green Around the Edges, published by “The Economist”.

Ignorance Costing American Taxpayers

A particular topic of interest to American businesses is that “only one-third of the available energy-saving opportunities with a cost-effective payback period” are being put to use (research performed by the International Energy Agency). Smart appliances, solar power and alternative cooling systems are examples of energy-efficient and cost-reducing solutions that are being widely ignored; a disappointing fact that the author blames on “ignorance, inertia, and misaligned incentives.”

Another unused pay-back incentive is the section 179D tax deduction, a green building initiative that rewards qualifying businesses up to $1.80 per square foot in deductions for eligible projects completed since 2006.

The 179D deduction is available to building owners and lessees who make updates to their commercial buildings, reducing energy and power consumption by at least 10%.

Congress designed this particular deduction to counter growing energy-related concerns, such as the article’s claim that powering air conditioners in commercial buildings can account for 30% of all electricity consumption during a hot day in the U.S.

More Demand for Public Energy-Saving Renovations

According to the IEA’s research, the power required to light, heat, cool and ventilate buildings accounts for roughly one-third of the global energy demand. Though energy standards for buildings are changing almost yearly, it’s estimated that half of the buildings standing today will remain upright and occupied in 2050.

If this is true, the demand for renovating and refurbishing older buildings over the next 35 years will create billions of dollars in revenue and deductions for businesses that perform energy-saving renovations for government-owned properties.

Additionally, 179D has an exception for public property that allows the designers of municipal structures to receive a deduction for renovations or retrofits of existing government buildings. This special rule applies to architects, engineers, contractors, environmental consultants or energy services providers who perform work on schools, libraries, airports, court houses and more.

Consumers Throwing Away Energy and Money

The Economist proposes a solution to promoting a more power-conscious society, and there is truth to it: “The simplest measure is to persuade consumers to stop throwing energy away.”

American consumers need to be educated about the benefits of investing in energy conservation, and the tax deductions that are entitled to those to help integrate it.

Let us know about your company’s energy-saving efforts. Please contact us today if you’d like to learn how your company may be eligible to claim 179D and other lucrative tax incentives available to U.S. businesses.

Additional statistics provided by the UN Environment Programme.