Advance EPact eNewsletter

Introduction

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National Update: EPAct 2005

On March 1st, 2007, a cross-industry team of individuals representing NEMA, the American Institute of Architects (AIA), the Natural Resources Defense Council (NRDC), and several other interested parties will meet with representatives of the Internal Revenue Service to address a number of topics related to EPAct 2005 tax deduction opportunities. Agenda items include the review of incentive program implementation, discussion of the just-published NREL guidance document and its impact on current program implementation procedures, and modification of IRS Form 4562 to account for 179D-related depreciation. The group will also discuss the status of implementation procedures for the pass-through of the deduction on publicly-owned projects as well as the status of legislative initiatives and potential impacts on the incentive program.

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EPAct 2005 Opportunities Await You….

Tax deductions offered through EPAct 2005 are currently available on qualifying lighting technologies placed into service between January 1, 2006 and December 31, 2008...so don't let the unprecedented opportunity to benefit from a lighting upgrade while taking advantage of government-sponsored financial incentives pass you by!

For more details on the commercial building tax deduction, consult the following existing as well as new and noteworthy resources:

EPAct 2005 Resources:

New and Noteworthy! In February 2007, The National Renewable Energy Laboratory (NREL) published its “Energy Savings Modeling and Inspection Guidelines for Commercial Building Federal Tax Deductions.” This document provides guidance for modeling and inspecting energy-efficient property in commercial buildings for certification of the energy and power cost savings related to IRS tax deduction opportunities offered in EPAct 2005. To access the document, visit the NREL web site..

Recently available! On October 3rd, 2006, NEMA issued its official “Guidance on Energy Policy Act Commercial Building’s Tax Deduction.” This document helps clarify a number of issues for engineers and contractors as it relates to qualification for tax deduction opportunities and offers the procedures and templates which, once completed, can be used by a tax accountant to prepare the necessary documentation for the IRS. This NEMA guidance document can be accessed on the IRS web site.

A website devoted solely to providing information on lighting upgrade activities and related EPAct 2005 tax deduction opportunities was launched in Spring 2006 at www.lightingtaxdeduction.org.

For up-to-the-minute information on EPAct 2005 and related tax incentives, continue to visit www.efficientbuildings.org, www.energytaxincentives.org, or NEMA.org.

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Leading with Lighting

The following real-life case study helps demonstrate how a leading California-based medical research institute improved its lighting quality and bottom line by pursuing a lighting upgrade:

Based on its commitment to developing and utilizing cutting-edge technology to help contribute to the betterment of health and the human condition, it came as no surprise that a leading California-based medical research institute would pursue a lighting upgrade for the benefit of its own employees.

Faced with the presence of outdated lighting in two of its underground parking structures, the institute embarked on a lighting upgrade within the two and three-story facilities. The original 150-watt High Pressure Sodium lighting in place cast a dull, orange glow throughout the space, giving it a basement-like appearance and making it difficult for employees to identify their cars

Desiring a safer, more modern, and more energy-efficient technology consistent with their own high-tech, cutting-edge industry approach, the management team opted for a 100-watt Ceramic Metal Halide system involving Philips Lighting's MasterColor® ED-17 lamps driven by Advance's e-Vision® electronic HID ballasts. In addition to the system's superior white light, high color rendering, unparalleled uniformity, consistent lamp-to-lamp color, and high energy-efficiency, the lamps' 20,000-hour life span will reduce maintenance requirements and costs over the life of the system.

Following the upgrade within the parking facilities' 350+ fixtures, light levels immediately increased by an estimated 35%, while the quality of the light—made significantly whiter and brighter--improved immensely. Total fixture wattage declined from 190 watts to 112 watts, a 41% drop, which helped to radically reduce the facility's monthly $1.5 million electric bill and offset the company's high 14-18 cent kWh electricity rates. And with the easy one-to-one changeout of fixtures and electronic technology associated with the Philips Lighting and Advance system, maintenance concerns will be minimized throughout the life of the system.

Subsequently approved as the company's new standard technology for other applicable venues, ceramic metal halide technology provided this leading research facility with the combined benefits of improved lighting quality, enhanced safety and security, low maintenance, and significant energy savings and will continue to yield dividends for years to come.

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News You Can Use

Buyers Eye Energy Prices
According to a survey featured on PurchasingData.com, energy prices are “back as the top concern” of the purchasing community in 2007. Almost three in five respondents (59%) expect prices to increase this year.

President Bush Signs Executive Order on Renewable Energy President Bush signed an executive order in January that mandates an increased use of energy efficiency and renewable fuels throughout the federal government. By 2015, Executive Order 13423 requires greenhouse gas emissions by federal agencies to be 30% lower than their 2003 levels.

New building construction and renovations must meet the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings, which include a target energy use of 30% below the average building performance for new buildings and a target of 20% below the average for renovations. By 2015, 15% of each agency's building inventory must meet these Guiding Principles.

The 2006 Memorandum of Understanding can be accessed on the ENERGY STAR web site.

Demand-Side Management Incentives On Upswing
According to the Energy Information Administration, expenditures on Demand Side Management (DSM) activities by the nation’s 3,000+ utilities totaled $1.9 billion in 2005, the highest they have been since 1996. DSM-related offerings by utilities include product rebates, other financial incentives, educational programs, and promotions designed to affect consumption patterns and promote energy conservation. Once reaching a high of $2.7 billion in 1993-1994, nominal DSM expenditures have declined significantly over the last 10 years, in part due to the elimination of some DSM requirements when states entered competitive energy markets. However, a resurgence in the extension of energy-efficient product rebates as well as new programs designed to deliver real-time price signals to consumers are accounting for the positive increase in DSM expenditures over the last two years.

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Product Spotlight

Simplify the Lighting Upgrade Process With Advance's
Exclusive New “Ballast Checker”

Lighting upgrades have never been easier with Advance's Ballast Checker, a hand-held device that quickly identifies a ballast's technology type for use in confirming ballast status and pinpointing lighting upgrade opportunities.

When pointed at a fixture, the Ballast Checker turns green if the light source is powered by a high frequency electronic ballast and orange if it's powered by a magnetic ballast, indicating a prime opportunity for a lighting upgrade involving electronic technology. In addition to assisting contractors, distributors, and other lighting professionals in determining a ballast's status as well as adding credibility when conducting a lighting audit, Advance's Ballast Checker can be used to verify that a fixture has indeed been installed with an electronic ballast post-installation.

Compact and lightweight, the Ballast Checker can operate at up to 15 feet or more from a light source and comes complete with long-life batteries that are pre-loaded for immediate use as well as an attached lanyard for carrying convenience.

For more information on the Advance Ballast Checker (including price and availability), contact your Advance sales representative or your nearest Advance stocking distributor or visit www.ballastchecker.com.

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Customer Spotlight

Jeffrey M. Fadden
Principal of Northeast-based Creative Lighting Solutions LLC

On the EPAct 2005 commercial
tax deduction submission process

Jeffrey M. Fadden "Following completion of a successful lighting upgrade project for a New Jersey-based client, I recently submitted the necessary paperwork to apply for an EPAct 2005 tax deduction on their behalf. Overall, the process was very manageable and straightforward. While the application requires a solid tracking of the scope of the project and the results, the IRS and NEMA have made all of the necessary forms, instructions, and software readily available on a variety of websites. As a result of my client's lighting upgrade, they will experience a less-than-two-year payback and an over 50% return on investment on the project. Through EPAct, they will now also be in consideration for an up to $100,000 tax incentive, which will further increase their ROI and dramatically shorten their payback period."