Credits, Rebates and Incentives, Oh My!

by Marcel Perry, SunPro Tinting, Inc.
ASID Industry Partner and Eco Committee Member

It can be a very confusing process trying to understand what’s available when it comes to Tax Credits, Federal and State Rebates, and Government Incentives. These programs are available for all of us to take advantage of, not only to save costs, but most importantly, to save energy and help green our world. Let’s start with the basics and define the terms:

Tax Credits: a direct reduction in tax liability (not dependent on the taxpayer's tax bracket).

Tax Rebate: a set monetary amount that reduces the tax to be paid by the full amount of the rebate. Tax rebates treat all taxpayers equally by giving the same amount of rebate regardless of income level.

Incentives: a means of employing the tax code to stimulate investment in or development of a socially-desirable economic objective, such as saving energy by way of improvements that reduce energy use.

Wow, what a mouthful. The government implemented a level of tax reforms and incentives for all of us starting several years ago. At one time, if you purchased an item that was energy-efficient, you could receive a 5% tax credit of the monies spent on materials (not labor) up to $500.00. In 2009 the government increased that limit to 30% and up to $1500. This tax credit has been extended through 2013. This credit is designed for residential use only, but there are several plans for the commercial customers as well.

One of the best programs is the Energy Policy Act of 2005, or EPAct, which offers commercial enterprises a one-time tax incentive for energy-efficiency upgrades. Projects that include improvements to the building envelope, HVAC, and lighting may qualify for the highest credit of $1.80/sq. ft. (per square feet of floor space in the building.) Upgrades of lighting only, for example, may quality for the lesser credit of $.40/sq. ft. to $.60/sq. ft.

SDG&E offers cash incentives/rebates for lighting, refrigeration, natural gas, food services and many other technologies improvements. Any medium- or large-sized SDG&E business customer on a valid commercial or agricultural rate with a monthly electric demand of 100kW or above and/or an average monthly therms usage of 4,166 therms or above will qualify.

In my industry, solar control window film installed on east, south, or west windows may qualify for a rebate up to $1.35/sq. ft. from SDG&E. Window film is a proven technology listed by the government to reduce energy costs by reducing excessive solar heat gain. Based on customary installation cost for medium-sized commercial projects, the average return on investment (payback) from solar film application was only 2.65 years, which is impressive. These savings were the result of reducing annual electricity kilowatt-hour usage by an average of 6.6% and reducing summer month peak kW demand on average by 6.4%. Take that savings and add the rebate of $1.35/sq. ft. and you can improve the energy efficiency and interior comfort of your building while enjoying these saving for a long time.

Bottom line: look for tax credits, rebates and incentives when you’re planning a project or just want to help your clients reduce their carbon footprint. We all need to look for ways to help save our world for generations to come. Here are some web sites that can help you get more information on what’s available, or feel free to contact me directly:

http://sdge.com/business/rebatesincentives/
www.energy.gov/taxbreaks.htm
http://www.energystar.com/
http://www.aeiconsultant.com/

Marcel Perry
SunPro Tinting, Inc.
687 Second Street
Encinitas, CA 92024
760-753-6418