ENERGY TAX ADVANTAGES INCENTIVES REBATES

INCENTIVES: CREDITS – DEDUCTIONS - REBATES INCENTIVE: Any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to alternatives. REBATE: An amount paid by way of reduction, return, or refund on what has already been paid or contributed. CREDIT (TAXATION): A reduction of taxes – dollar for dollar. DEDUCTION: Reduces taxes by the percentage fixed for the taxpayer's income bracket

INCENTIVE: Any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to alternatives.

REBATE: An amount paid by way of reduction, return, or refund on what has already been paid or contributed.

CREDIT (TAXATION): A reduction of taxes – dollar for dollar.

DEDUCTION: Reduces taxes by the percentage fixed for the taxpayer's income bracket

ARIZONA INCENTIVES Combination of : Incentives Credits Deductions … .participates in Federal Programs

Combination of :

Incentives

Credits

Deductions

… .participates in Federal Programs

ARIZONA INCENTIVES Corporate Tax Credit Non-Residential Solar & Wind Tax Credit Green Building Incentive Chandler - Fee reimbursement for LEED Cert Scottsdale – Expedited plan review Buckeye – Expedited plan review, free construction H20 passes (Aqua Ctr) GR CO Tucson – Solar credit $1000 Personal Deduction Energy Efficient Residences Qualifying Wood Stove Deduction Personal Tax Credit Non residential Solar & Wind Tax Credits Residential Solar & Wind Energy Systems Property Tax Assessment Property Tax Assessment for Renewable Energy Property Property Tax Exemption Solar Energy Property Tax Exemption Sales Tax Exemption Solar & Wind Equipment Sales Tax Exemption

Corporate Tax Credit Non-Residential Solar & Wind Tax Credit

Green Building Incentive Chandler - Fee reimbursement for LEED Cert

Scottsdale – Expedited plan review Buckeye – Expedited plan review, free construction H20 passes (Aqua Ctr) GR CO Tucson – Solar credit $1000

Personal Deduction Energy Efficient Residences Qualifying Wood Stove Deduction

Personal Tax Credit Non residential Solar & Wind Tax Credits Residential Solar & Wind Energy Systems

Property Tax Assessment Property Tax Assessment for Renewable Energy Property

Property Tax Exemption Solar Energy Property Tax Exemption

Sales Tax Exemption Solar & Wind Equipment Sales Tax Exemption

ARIZONA INCENTIVES Utility Loan Program APS - GEOSmart Financing Program Sulphur Springs Valley EC - Member Loan Program Sulphur Springs Valley EC - SunWatts Loan Program Utility Rebate Program APS - Energy Efficiency Solutions for Business APS - Energy Efficient AC Rebate Program APS - Renewable Incentive Program SRP - EarthWise Solar Energy SRP - PowerWise Business Solutions Energy Efficiency Rebate Program Sulphur Springs Valley EC - Residential Energy Efficiency Rebate Sulphur Springs Valley EC - SunWatts Rebate Program TEP - Commerical Energy Efficiency Rebate Program TEP - Renewable Energy Credit Purchase Program TEP - Residential Energy Efficiency Rebate Program Trico Electric Cooperative - SunWatts Incentive Program UES - Commercial Energy Efficiency Rebate Program UES - Energy Smart Homes Program

Utility Loan Program APS - GEOSmart Financing Program Sulphur Springs Valley EC - Member Loan Program Sulphur Springs Valley EC - SunWatts Loan Program

Utility Rebate Program APS - Energy Efficiency Solutions for Business APS - Energy Efficient AC Rebate Program APS - Renewable Incentive Program SRP - EarthWise Solar Energy SRP - PowerWise Business Solutions Energy Efficiency Rebate Program Sulphur Springs Valley EC - Residential Energy Efficiency Rebate Sulphur Springs Valley EC - SunWatts Rebate Program TEP - Commerical Energy Efficiency Rebate Program TEP - Renewable Energy Credit Purchase Program TEP - Residential Energy Efficiency Rebate Program Trico Electric Cooperative - SunWatts Incentive Program UES - Commercial Energy Efficiency Rebate Program UES - Energy Smart Homes Program

FEDERAL INCENTIVES: CREDITS OR DEDUCTIONS - Energy Efficient Commercial Buildings Tax Deduction - Energy Efficient New Homes Tax Credit for Home Builders - Modified Accelerated Cost Recovery System (MACRS) + Bonus Business Energy Investment Tax Credit (ITC) - Qualified Energy Conservation Bonds Qualifying Advanced Energy Project Investment Tax Credit Renewable Electricity Production Tax Credit (PTC) Renewable Energy Production Incentive (REPI) - Tribal Energy Program Grant Residential Energy Conservation Subsidy Exclusion (Corp) Residential Energy Conservation Subsidy Exclusion (personal) Residential Energy Efficiency Tax Credit - US DOE – Loan Guarantee Program Residential Renewable Energy Tax Credit - Clean Renewable Energy Bonds (CREBS) Energy Efficient Appliance Tax Credit for Manufacturers - Energy Efficient Mortgages Federal Appliance Standards - US Dept of Treasury – Renewable Energy Grants US Federal Government – Green Power Purchasing Goals USDA – Rural Energy for America Program Grants (REAP) USDA – Rural Energy for America Program Loan Guarantees (REAP) Energy Goals and Standards for Federal Buildings Energy Reduction Goals for Federal Agencies Interconnection Standards for Small Generators

- Energy Efficient Commercial Buildings Tax Deduction - Energy Efficient New Homes Tax Credit for Home Builders - Modified Accelerated Cost Recovery System (MACRS) + Bonus Business Energy Investment Tax Credit (ITC) - Qualified Energy Conservation Bonds Qualifying Advanced Energy Project Investment Tax Credit Renewable Electricity Production Tax Credit (PTC) Renewable Energy Production Incentive (REPI) - Tribal Energy Program Grant Residential Energy Conservation Subsidy Exclusion (Corp) Residential Energy Conservation Subsidy Exclusion (personal) Residential Energy Efficiency Tax Credit - US DOE – Loan Guarantee Program Residential Renewable Energy Tax Credit - Clean Renewable Energy Bonds (CREBS) Energy Efficient Appliance Tax Credit for Manufacturers - Energy Efficient Mortgages Federal Appliance Standards - US Dept of Treasury – Renewable Energy Grants US Federal Government – Green Power Purchasing Goals USDA – Rural Energy for America Program Grants (REAP) USDA – Rural Energy for America Program Loan Guarantees (REAP)

Energy Goals and Standards for Federal Buildings Energy Reduction Goals for Federal Agencies

Interconnection Standards for Small Generators

FEDERAL OPPORTUNITIES Energy Efficient Commercial Buildings Tax Deduction (for taxpayer and primary designer) Energy Efficient New Homes Tax Credit for Home Builders (both site built and manufactured) Renewable Credits (ITC) Modified Accelerated Cost Recovery System (MACRS) + Bonus

Energy Efficient Commercial Buildings Tax Deduction (for taxpayer and primary designer)

Energy Efficient New Homes Tax Credit for Home Builders (both site built and manufactured)

Renewable Credits (ITC)

Modified Accelerated Cost Recovery System (MACRS) + Bonus

FEDERAL CREDITS: ITC Solar: Water Heater Space Heater Thermal Electric Thermal Process Heat Solar Hybrid Lighting Photovoltaics (PV) Geothermal: Electric Heat Pumps Direct Use Fuel Cells Wind Biomass CHP/Cogeneration Microturbines

Solar: Water Heater

Space Heater

Thermal Electric

Thermal Process Heat

Solar Hybrid Lighting

Photovoltaics (PV)

Geothermal: Electric

Heat Pumps

Direct Use

Fuel Cells

Wind

Biomass

CHP/Cogeneration

Microturbines

FEDERAL CREDITS: ITC Commercial, Industrial, Utilities SOLAR: 30% of costs – NO CAP FUEL CELLS: 30% of costs – NO CAP ($1500/.5KWh) SMALL WIND TURBINES: 30% of costs – NO CAP (<100kW) GEOTHERMAL SYSTEMS: 10% of costs NO CAP MICROTURBINES: 10% OF COSTS – $200/Kw of capacity CHP: 10% of costs –

SOLAR: 30% of costs – NO CAP

FUEL CELLS: 30% of costs – NO CAP ($1500/.5KWh)

SMALL WIND TURBINES: 30% of costs – NO CAP (<100kW)

GEOTHERMAL SYSTEMS: 10% of costs NO CAP

MICROTURBINES: 10% OF COSTS – $200/Kw of capacity

CHP: 10% of costs –

COMMERCIAL BUILDINGS EPACT 2005TAX DEDUCTION Section 179D

COMMERCIAL BUILDINGS Section 179D Deduction = up to $1.80/sq ft for reduction of total energy use by 50% (whole building) Partial Deduction of $.60/sq ft for 16 2/3 energy reduction for any one of the three systems Energy modeling required New construction, retrofits

Deduction = up to $1.80/sq ft for reduction of total energy use by 50% (whole building)

Partial Deduction of $.60/sq ft for 16 2/3 energy reduction for any one of the three systems

Energy modeling required

New construction, retrofits

COMMERCIAL BUILDINGS Section 179D INTERIM RULE: LIGHTING Watts per square foot Space by space approach BI-LEVEL SWITCHING MANDATORY EXCLUSIONS: Lobbies, guest rooms, rest rooms, storerooms

INTERIM RULE: LIGHTING

Watts per square foot

Space by space approach

BI-LEVEL SWITCHING MANDATORY

EXCLUSIONS:

Lobbies, guest rooms, rest rooms, storerooms

COMMERCIAL BUILDINGS Section 179D INTERIM LIGHTING RULE From $.030/sq ft for exceeding ASHRAE 90.1 2001 by 25% From $.060/sq ft for exceeding ASHRAE 90.1 2001 by 40% Exception: Warehouses MUST exceed by 50% ASHRAE 90.1 2001

COMMERCIAL BUILDINGS Section 179D PUBLIC – GOVERNMENT BUILDINGS: “ Primary Designer” may qualify for the deduction benefits (one who creates the technical specifications)

PUBLIC – GOVERNMENT BUILDINGS:

“ Primary Designer” may qualify for the deduction benefits (one who creates the technical specifications)

COMMERCIAL BUILDINGS Section 179D CERTIFICATION FOR SECTION 179D Third – party certification Party “not-related” to taxpayer Approved software (by IRS) required Deduction may be taken for projects from 1.1.06 through 12.31.13

CERTIFICATION FOR SECTION 179D

Third – party certification

Party “not-related” to taxpayer

Approved software (by IRS) required

Deduction may be taken for projects from 1.1.06 through 12.31.13

HOME BUILDER CREDIT $1000 to $2000 SITE BUILT AND MANUFACTURED HOMES Homes completed post August 8, 2005 – purchased after December 31, 2005 and prior to January 1, 2009

$1000 to $2000

SITE BUILT AND MANUFACTURED HOMES

Homes completed post August 8, 2005 – purchased after December 31, 2005 and prior to

January 1, 2009

HOME BUILDER CREDIT $1,000 to $2,000 CREDIT Qualification: Built in the US Construction “substantially” completed post 8.8.2005 Meets statutory energy savings requirements Acquired from the eligible contractor after 12.31.2005 and prior to 1.1.2008 – for use as a residence

$1,000 to $2,000 CREDIT

Qualification:

Built in the US

Construction “substantially” completed post 8.8.2005

Meets statutory energy savings requirements

Acquired from the eligible contractor after 12.31.2005 and prior to 1.1.2008 – for use as a residence

HOME BUILDER CREDIT SITE BUILT = 50% energy reduction $2,000 (International Energy Conservation Code Standard ) MANUFACTURED HOME = $1,000 - $2,000 30% to 50% energy reduction Must receive certification

SITE BUILT = 50% energy reduction $2,000 (International Energy Conservation Code Standard )

MANUFACTURED HOME = $1,000 - $2,000

30% to 50% energy reduction

Must receive certification

DEPRECIATION Modified Accelerated Cost Recovery System (MACRS) + Bonus How to get the Feds to underwrite an energy efficiency project Modify asset classification to “catch up” missed depreciation Bonus of 50% on “NEW” assets

How to get the Feds to underwrite an energy efficiency project

Modify asset classification to “catch up” missed depreciation

Bonus of 50% on “NEW” assets

DEPRECIATION Depreciation is about “useful life” IRS has it’s own rules about “useful life” Commercial property = 39 years Commercial residential – 27.5 years “ Real Property” vs. “Tangible Personal Property” 39 year assets (27.5) 15 year assets 5 year assets

Depreciation is about “useful life”

IRS has it’s own rules about “useful life”

Commercial property = 39 years

Commercial residential – 27.5 years

“ Real Property” vs. “Tangible Personal Property”

39 year assets (27.5)

15 year assets

5 year assets

RECLASSIFICATION

IRS OPTIONS “ Catch up” missed “Catch up” missed depreciation: Existing/owned property (since 1992) Start with correct depreciation: New construction or acquisition Remodels/retrofits/additions

“ Catch up” missed “Catch up” missed depreciation:

Existing/owned property (since 1992)

Start with correct depreciation:

New construction or acquisition

Remodels/retrofits/additions

“ BONUS” DEPRECIATION Assets, 2008 & 2009 50% “Bonus” on “NEW” assets Combine Section 179 with “Bonus” (expense + bonus)

Assets, 2008 & 2009

50% “Bonus” on “NEW” assets

Combine Section 179 with “Bonus” (expense + bonus)

INFORMATION Difficulty in keeping up with new federal and state opportunities Approximately 60 new initiatives monthly

Difficulty in keeping up with new federal and state opportunities

Approximately 60 new initiatives monthly

ESSENTIAL WEB SITES www.energy.gov - Department of Energy www.energystar.gov – Variety of discussion residential & comm www.epa.gov/greenbuilding - Discussions of sustainability www.irs.gov – Tax info: Notice 2006-52/N2008-40/IRB2008-14 www.dsireusa.org – All states and federal incentives www.ashrae.org – All Standards www.aceee.org – American Council for an Energy Efficient Economy www.energytaxincentives.org – Tax Incentives Assist Project (TIAP) www.usgbc.org – Leed & sustainability www.greenbuildings.com – Principally residential

www.energy.gov - Department of Energy

www.energystar.gov – Variety of discussion residential & comm

www.epa.gov/greenbuilding - Discussions of sustainability

www.irs.gov – Tax info: Notice 2006-52/N2008-40/IRB2008-14

www.dsireusa.org – All states and federal incentives

www.ashrae.org – All Standards

www.aceee.org – American Council for an Energy Efficient Economy

www.energytaxincentives.org – Tax Incentives Assist Project (TIAP)

www.usgbc.org – Leed & sustainability

www.greenbuildings.com – Principally residential

THANK YOU! Marky Moore, LEED AP President CAPITAL REVIEW GROUP 602 741.7776 – Direct [email_address]