Tax Advantages to Going Green

1. Go Green Environmental & Energy Conference
Financing & Incentives Session
Tax Advantages to Going Green
Presented by:
Joel E. Ackerman, CPA, MST
Wednesday, October 26, 2011

2. Did you know?
• Every year Americans use 4 Billion kWh to
brew 30 billion pots of coffee.
• Office Buildings waste up to 1/3 of the energy
consumed.

3. The Importance of Reducing Energy Use
Outside the Box
Making Envelope Tight
Architectural Design for
Best Energy Use
Inside the Box
Conservation & Efficiency
Building Management
Systems
Indoor Air Quality
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4. Goal: Reduce Energy Use
In the US alone, Buildings Account for:
• 72% of electricity consumption
• 39% of energy use
• 38% of all carbon dioxide (CO2) emissions
• 40% of raw materials
• 30% of waste output (136 million tons
annually)
• 14% of potable water consumption

5. Economics of Green Building
▶ Green buildings, energy efficiency in buildings
comes at an increased cost
▶ Incentives help to offset that cost
▶ Federal Energy Efficiency tax deductions
▶ Federal Solar tax credits
▶ State Sustainability, LEED, solar and energy tax credits
▶ State exemptions from property tax, sales and use tax
▶ Utility incentives for solar, energy efficiency, LEED

6. Depreciation
Depreciation is a tax deduction that goes right to the
bottom line without any additional cash outlay.
Accelerated depreciation, bonus depreciation, and
Section 179 provide significant deductions in the early
years these improvements are placed in service
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7. Cost Segregation
A Cost Segregation Study is an approved tax and
engineering approach to properly allocate a real
estate holding for depreciation purposes.
Bottom line benefit: Increase property owner’s bottom
line by reducing tax liabilities in the early years of
owning or improving one’s real estate.
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8. Energy Policy Act of 2005
Section 179D Enacted
• Congress passed legislation in August of 2005 to encourage
property owners to build energy efficient real estate properties
to promote reduction in energy consumption. Service dates
were from 1/1/06 through 12/31/08.
• The Emergency Economic Stabilization Act of 2008 (HR-
1424), approved and signed on October 3, 2008, extends the
benefits of the Energy Policy Act of 2005 through
December 31, 2013.
• The ruling allows up to a $1.80 per sq. ft. tax deduction for
commercial property owners. Incentives were also allowed for
contractors, site home builders and residential home owners.

9. Additional Incentives and Programs
• Public Utility
Rebates
• Insurance
Savings
• State and Local
Rebates
Visit www.dsireusa.org for a clickable map and a listing of all federal
and state incentives for energy retrofits

10. Quantifiable Results for Changes to Controls in
100,000 sq ft bldg
Low Est. Low Est. High Est. High Est.
Energy Cost Energy Cost
Savings % Savings $ Savings % Savings $
Adjust Temperature 1.1 2,384 2.9 6,285
After hours usage 0.7 1,517 1.5 3,251
Adjust ventilation 2.9 6,285 5.7 12,353
Limit access to thermostats 0.3 563 1.3 2,817
Optimize Start-up Times 0.6 1,300 2.9 6,285
Seasonal Changes to Thermostats 1.1 2,384 5.7 12,353
Coast Last Hour of Operation 0.6 1,300 2.9 6,285
CUMULATIVE EFFECT 7.3% $15,733 22.9% $49,629

11. Quantifiable Results for Changes to Lighting
systems in 100,000 sq ft bldg
Low Est. Low Est. High Est. High Est.
Energy Cost Energy Cost
Savings % Savings $ Savings % Savings $
Change incandescents to CFLs 0.6 1,300 1.2 2,601
Convert T-12 to T-8 and T-5 3.5 7,585 9.7 21,022
Delamp 3.3 7,152 5.0 10,836
Full Floor Lighting Sweeps 0.5 997 1.4 3,034
Occupancy Sensors 0.3 672 3.2 6,935
High Efficiency LED Exits Signs 0.2 325 0.3 607
Timer Controls for Exterior Lights 0.7 1,582 2.9 6,285
CUMULATIVE EFFECT 9.1% $19,613 23.7% $51,320

12. A Dime For A Dollar?
The cost of Cost Segregation Studies and other
tax incentive products can lead to tax savings of
10-15 times the cost!

13. Thank You!
Any Questions?
Contact Info:
Joel E. Ackerman, CPA, MST
Director
200 Parkway Drive South
Suite 302
Hauppauge, NY 11788
Phone: 631-870-3920
jackerman@fuoco.com