What is the Energy and Policy Act of 2005?

Benefit 1- Identify EPAct Incentives

The Energy and Policy Act of 2005

The Energy and Policy Act of 2005 was originally put into place in 2005 by President Bush as an incentive to get businesses to invest in energy upgrades to slow down the continual increase in demand on the country’s aging electrical grid infrastructure. 

The act was renewed in 2009 by President Obama through the Economic Stimulus act which extends the program until 2013. 

There is very little knowledge of the system throughout industry and even accountants are unaware of the deduction until someone asks them to research the deduction.

The core feature of the act is the ability of an owner to take advantage of a tax deduction.  The main functions of EPAct are as follows:

  • Allows a building owner to take a straight tax deduction of $1.80 per square foot on your facility. 

  • The deduction is divided into three areas; Electrical, HVAC and the Building envelope. 

  • Each of the areas qualifies for a $.60 per square foot deduction if area that has been upgraded is at least 50% below the ASHRE standard. 

  • There is a sliding scale beginning at 25% of the ASHRE standard for electrical upgrades which may qualify the facility for even a partial deduction.

After identifying the systems within your facility, we are then able to determine the potential tax deduction benefit from an energy system upgrade. 

If the upgrade is electrical, we will determine the square footage of the area to be upgraded and calculate the square footage by $.60 per square foot.

Example-

100,000 square foot facility Qualifies for EPAct.

The facilities Tax Deduction would be $60,000 that could be written off in the year of the improvement.

(100,000 square feet x $.60 per square foot = $60,000.)

If the building does not qualify for the full potential tax savings, there is a sliding scale starting with a 25% tax deduction depending on the facility. 

We identify the potential savings for you.  We know the system, you don’t have to worry.

If we move ahead with the project, we will provide all the paperwork necessary to take advantage of the tax deduction.