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Posted On: 05/08/2006

New NEMA site supports lighting tax deduction

PlantServices.com

The National Electrical Manufacturers Association’s (NEMA) Lighting Systems Division has launched a Web site (lightingtaxdeduction.org) for owners, specifiers, installers, and sellers of lighting systems.  The Web site provides comprehensive education and implementation information about lighting upgrades covered by the commercial buildings tax deduction provision of the Energy Policy Act of 2005 (EPAct).

“This provision represents a strong incentive for building owners to reduce operating costs while increasing profitability and competitiveness by investing in available, proven, energy-efficient lighting choices,” says Brian Dundon, chairman of NEMA’s Lighting Executive Board of Directors.  “NEMA estimates that this provision will result in about $500 million in additional lighting product sales.  In addition, the nation will benefit from an estimated 312 MW in reduced electrical demand and an estimated reduction in national carbon emissions of 10 million metric tons.”

EPAct 2005 includes a commercial buildings tax provision that provides a deduction of the cost of energy efficient systems up to $1.80 per sq. ft. for buildings designed for 50% energy cost savings relative to a building designed to ASHRAE Standard 90.1-2001 Energy Standard for Buildings Except Low-Rise Residential Buildings. Lighting systems, HVAC/water heating and building envelope improvements can each qualify for up to a 60-cent per sq. ft. deduction for their contribution to the 50% savings. The law allows lighting to receive up to a 30-cent to 60-cent deduction for savings in lighting power density from 25% to 40% respectively, with linear interpolation between 25% and 40% reduction.  The interim lighting provision requires bi-level switching in addition to the 90.1-2001 lighting controls. Final regulations are pending from the U.S. Department of Treasury, but utility and other rebate incentives can be combined with the deduction.

The Web site contains frequently asked questions, process maps detailing compliance with Standard 90.1-2001, and examples of projects that demonstrate how target reductions in lighting power can be achieved. The site also provides descriptions of popular energy-efficient lighting strategies and technologies, links to research studies, a directory of NEMA Lighting Systems Division members, and additional communications resources.

“Taking advantage of deductions NEMA fought for in the 2005 Energy Policy Act represents a win-win situation for manufacturers, building owners, and the public,” says Evan Gaddis, NEMA president. “LightingTaxDeduction.org provides practical guidance on implementation of the commercial buildings tax deduction.”

The site is a companion to efficientbuildings.org, produced by the Commercial Building Tax Deduction Coalition, which addresses incentives for efficiency improvements across HVAC/hot water, building envelope, and interior lighting systems.