The Energy Policy Act of 2005 was passed on July 29, 2005 and signed into law by President George W. Bush on August 8, 2005. The bill was an attempt to oppose the increasing energy problems and inefficiencies. The bill had a relatively slow starts but has come of age in the recent years. Below are common questions and concerns regarding the EPAct. Here’s what you need to know.
The Energy Policy Act of 2005 is a bill passed to create tax deductions for energy efficient buildings in Section 179D. These buildings include:
You must obtain certification of the requirements from a qualified individual. This certification must include:
The EPAct encourages energy efficient buildings and renovations. The more energy efficient the building, the higher the tax deduction. The deduction caps out at $1.80 per square foot and cannot exceed the amount of the equipment and installation cost.
The EPAct tax deduction is based on the energy efficiency of commercial buildings. The efficiency can be measured in three ways.
|Whole Building Qualifitation||Partial Qualifiying Property (Lighting)||Interim Lighting Rule|
|Savings Requirements||50%||16.7%||25%-40% lower Lighting Power Density (50% for warehouses)|
|Tax Deductions||$1.80/sf||$0.60/sf||$0.60/sf multiplied by applicable percentage|
To qualify for the EPAct tax deduction you must either be an owner of a commercial property that is energy efficient or be an architect, designer, Energy Service Company (ESCO), or engineer of municipal buildings.
To certify EPAct you have to be a qualified individual in the district of the building. The IRS says a qualified individual is all of the following:
The Energy Policy Act of 2005 is a great way to further benefit from becoming energy efficient. Don’t miss out on the opportunity to capitalize on these deductions. Shop LED lighting for all your energy efficient lighting needs. For more assistance, contact us.
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