IRS Issues Notice Outlining Energy Efficiency Deduction for Commercial Buildings

The United States Internal Revenue Service (IRS–the part of the US government
which collects taxes) has issued an advanced copy of a notice
outlining how commercial building owners and lease holders can qualify for what
they call the energy efficiency deduction. The company that brought this to
our attention, Permlight Products, is the first to announce that its products
comply with the energy savings target outlined for the deductions. Permlight
says that its complete line of Embryton LED luminaires and LED sign products
provide 10 to 15X reduction of energy consumption over neon and a 2X energy
savings over fluorescent recessed can lighting. The deduction comes as part
of the energy policy act of 2005. It allows commercial building owners or lease
holders to deduct up to $1.80 per square foot of floor area for buildings that
achieve a 50 percent energy saving target. Buildings with below the 50 percent
cost reduction threshold can still qualify for a deduction of up to $.60 per
square foot of floor space if they meet a 16 2/3 percent energy savings target.