Your Energy Efficiency Incentive Questions Answered
It’s no secret that there are millions of dollars available to help companies offset the cost of energy efficiency investment but wading through the clutter of information on these incentives can prove challenging. There are many different types of incentives and understanding the differences is key to finding the right solution for you to maximize savings.
What is the difference between a tax deduction and a tax credit? Both tax deductions and tax credits reduce your tax liability but they do it differently. Tax deductions reduce taxable income while tax credits reduce the amount of tax you owe.
What types of tax incentives are available? Business owners are eligible for a variety of federal tax incentives for improving building energy efficiency.
What are rebates? Rebates are payments made directly to customers for purchasing or installing a specific energy efficiency measure.
Are there federal rebates available? There are no federal rebate programs available but many local and state governments as well as utility companies offer energy efficiency rebates.
What is a prescriptive rebate? A prescriptive rebate gives specific guidelines about energy efficiency installations and the rebate amount you will receive. As long as you meet the prescribed requirements and follow the application and submission process properly, you will be eligible for the rebate.
What is a custom rebate? A custom rebate is based on the actual amount of energy you save. These programs allow more flexibility for how you achieve energy savings but are usually subject to project approval and savings verification.
Who should I talk to about financing my energy efficiency project? There are several options available if you are interested in making energy efficiency improvements.
- Energy efficiency service companies like EES Consulting
- Traditional loans from financial institutions
- Third party financial companies
- PACE financing
- Utility companies
Where Should I Look?
Visit the Database of State Incentives for Renewables and Energy at www.DSIREUSA.org to identify what rebates and incentives are available in your area. Also be sure to check out your local utility provider’s website and search for “commercial incentives” or “rebate programs.”
Another route is to hire an energy efficiency consultant. These consultants can help you identify the programs applicable to your business and navigate the complexities of securing available rebates and tax incentives. We all want to reduce costs – why not get paid to do it?