This document discusses energy tax incentives under the Energy Policy Act (EPAct) 179D. It provides an overview of how 179D works, who benefits (private/public building owners, tenants, architects, engineers), and how to claim up to $1.80 per square foot in tax deductions for energy efficient commercial buildings constructed or renovated between 2006-2013. It also summarizes additional state and utility incentives and provides a case study example of over $1 million in tax deductions claimed for an IKEA project. The document is an advertisement for The Cotocon Group which provides cost segregation studies and consulting to help clients maximize their energy tax benefits.

1. ENERGY TAX INCENTIVES
And How They Can Benefit You…
The Cotocon Group
Tel: 888-98-COTOCON(26862)
jimmy@thecotocongroup.com
www.thecotocongroup.com

2. The Learning Objectives
• Understand how Energy Policy Act (EPAct) 179D works to claim
substantial benefits for energy efficient design, construction and
renovation of commercial buildings placed in service between the years
2006 and 2013.
• Learn how Private Building benefit Owners and Tenants and why
management companies, architects, engineers energy consultants should
also be aware of this policy.
• Learn how Public Buildings benefit Architects, Engineers and
Contractors as the “Designer” of new construction, additions or
renovations.
• Turn your knowledge and application of EPAct 179D into a new
Competitive Advantage and niche Business Development Strategy.
• Additional tax savings and other strategies like Cost Segregation and
“DEIRA” Insurance Replacement Appraisals.
• How to find additional savings through State, Local, Municipal and Local
Utility Rebates.

3. About Cotocon’s Tax Services
• The COTOCON Team is a licensed Engineering Firm with
niche Accounting and Tax expertise with offices on the East
Coast of the United States
• The COTOCON Team averages $10 million in monthly
refunds and tax benefits for real estate clients (50+ studies
per month!)
• The COTOCON Team averages $1 million in monthly
refunds and tax benefits for architects, engineering firms,
contractors and other firms involved in Public Building projects
• Clients include Google, Hilton, Marriott, Disney, Boeing, Ford,
BMW, Outback
• Partners with AIA, USGBC, Energy Star, DOE, ASHRAE,
ConEdison, NYSERDA

4. Energy Policy Act of 2005
• Congress passed legislation in August of 2005 to encourage
property owners to build energy efficient properties to promote
reduction in energy consumption. Service dates were from
1/1/06 through 12/31/08.
• The Economic Recovery and Stabilization Act of 2008 (HR-
1424), approved and signed on October 3, 2008, extends the
benefits of the Energy Policy Act of 2005 through 2013.
• The 179D ruling allows up to a $1.80 per sq. ft. tax deduction
for commercial property owners and tenants … Incentives were
also allowed for contractors, site home builders and residential
home owners.
 Note: You can go back 4 years and carry forward the
unused 179D energy tax benefit for 15 years.
 Important: CASH Refunds may be due to you!

5. Recap: EPAct 179D
For Commercial Buildings 2006-2013 (New Buildings & Renovations)
- Private Buildings (Benefits - Owner / Tenant)
- Public Buildings (Benefits - Architect/ Engineer / Contractor)
- Lighting | HVAC | Envelope (Roof / Windows / Insulation)
$.60 $.60 $.60 = $1.80 per SF
$100k SF = $180,000
- Model vs. ASHRAE 2001 90.1 (16 2/3% Improvement)
- Business Development Strategy (Value-Added Info)

6. Attention: Architects,
Engineers & Contractors
For energy-efficient commercial building
improvements (New Build or Renovations) made by
a Public or Government Entity ...
Examples: Schools K-12, Colleges, Universities, Civil,
Municipal, Government, Jails, Military Buildings, etc.
… the IRS now allows the deduction to be allocated
to the “person primarily” responsible for designing
the property and systems in lieu of the public entity.
 Did you read your AIA Journals?
 Did your Accountant tell you about this?

7. Goal: Reduce Energy Use
In the US alone … Buildings Account for:
• 72% of electricity consumption
• 39% of energy use
• 38% of all carbon dioxide (CO2) emissions
• 40% of raw materials
• 30% of waste output (136 million tons annually)
• 14% of potable water consumption

8. Who Benefits?
• Owners or Tenants who pay for new or
improved energy-efficient commercial
buildings since 2006 through 2013
• Designers of energy-efficient properties
installed in publicly-owned buildings.
• Homeowners
• Building and Real Estate Communities
all indirectly benefit.

9. Why Is the Energy Tax Benefit
Not Used?
• Less than 1% of eligible taxpayers have
filed for their energy tax benefits with the
IRS.
• Millions of taxpayers are due significant
benefits and possible refunds since 2006.
• Why are taxpayers missing significant
energy tax benefits and incentives?
 Low Awareness – No one was interested in the “good” times.
 Requires Qualified Engineer with Qualified DOE Software
 Requires Tax Paperwork – 179D Deduction

10. Ideal Candidates for 179D
• New Construction: Schools,
Office, Retail, Hospitality, Industrial,
Multi-Family
• Renovations & Retrofits:
Improvements to Lighting, HVAC,
Envelope (roof , insulation,
windows), Energy Performance
Contracting, CRA Redevelopment
• Green & LEED Certified
Buildings

11. Case Studies: 179D Energy Tax Benefits

12. Case Study: Nissan Dealership
• $35,000+ 179D Energy Tax Deduction
• $640,000+ Additional Cost Segregation Tax Benefit

13. $1,391,089 Energy Tax Deduction for IKEA
• IKEA Brooklyn, NY Project Area: 346,638 SF
Qualified for $.60 per SF 179D Tax Benefit $207,983
• Cost Segregation Study Five Year Cash Benefit: $16,975,757
$1,183,105.80 Energy Tax Credits CLAIMED for 5
additional IKEA Locations.
• Five year cash benefit from 3 Additional CSS = $8,301,688
• Total Five Year Cash Benefit for 4 buildings = $25,277,445

14. $117,666 Tax Benefit Claimed by
the Private Building Owner
• Republic Services
• LEED Silver
• 65,370 square feet
• Completed Fall 2008

15. Two Ways To Qualify Under 179D
1st - Using the “Whole Building Approach”
Get the full $1.80 per square foot if the
building reduces total annual combined
energy use by at least 50% compared to
similar building based on ASHRAE 90.1 2001
energy guidelines

16. 2nd - Qualifying Partial Building Systems
• Interior Lighting systems
up to $.60 per sf
• HVAC (Heating, Cooling,
Ventilation & Hot Water
systems) up to $.60 per sf
• Building Envelope (Roof,
Insulation, Windows) up to
$.60 per sf

17. • Lighting accounts for almost 40% of commercial
electrical consumption
• 100 Billion square feet of commercial space nationwide.
(Nearly all requires lighting … Parking Garages!)
• Less than 3% of eligible facilities have claimed EPAct
179D Deductions
• New energy-efficient lighting can save building owners
as much as 50% on their electric bills and payback in
two years or less
• Any building with a lighting system 10 years or older is
using old technology
• In addition to reduction in operating expense, new
lighting improves lighting quality, increases the asset
value and marketability of the building
The Lighting Opportunity

18. Relamp Case Study
Industry: Packaging Manufacturer
Building Size: 115,000 SF.
Actions: Replace (148) 400W MH
and (44) 190W T12 with (180)
220W T5 HO Fixtures
Project Cost: $35,000
Energy Savings: $11,000 per year
Rebates and Incentive: $20,000
Environmental Savings:
Prevents emission of 147 tons
of greenhouse gases

19. BUILDING ENVELOPE
• Roofs, Walls & Insulation
• Climate Considerations
• Doors, Windows & Openings
• Thermal Efficiency
• Reflectivity
• Moisture Buildup

20. 1st Step … Feasibility Analysis
• Review basic building info including location, SF,
year completed, scope of work, what systems
(Lighting / HVAC / Building Envelope)
• Prepare (complementary) Cost Benefit Analysis for each
building or portfolio of buildings for client to review
• Average COTOCON fee is $.05 - $.15 per sf
• Average client benefit is $1.20 per sf
• Agree on Engagement strategy, COTOCON collects
building plans and specs from client
• Cotocon completes review, energy modeling and
benefit calculation
• Cotocon schedules site visit as required by IRS
• Complete process takes 30-45 days

21. CERTIFICATION MUST INCLUDE:
• Statement regarding the energy efficiency of the building
(Lighting, HVAC and/or hot water system, Envelope)
• Statement that the reduction has been determined under the Rules of
Notice 2006-52
• Statement that field inspections have been performed verifying the
energy-saving assets
• Statement that approved software has used for calculations
• A list of qualifying assets and projected annual energy costs
• Completed by a Qualified, Independent 3rd Party
- Properly licensed engineer with accounting and IRS experience
- Not a related Individual or Entity
- Written statement of qualification to taxpayer
- The qualified firm’s (TCG) name, address and phone number
IRS GUIDELINES FOR 179D

22. Additional Federal Incentives
• Fuel Cells = 30% Credit
• Stationary Micro Turbines
• Power Plants = 10% Credit
• Solar Equipment = 30% Credit

23. State Incentives Can Be Equal or
Greater Than Federal Incentives
Federal Benefits Not Exclusive
• Important to know that new energy incentives
are coming online everyday.
• In addition to Federal incentives, many States
also have matching credits as well.
• Also, utility companies have incentives related to
energy assets.
• Important to look at ALL incentives: State,
Federal, Local Government and Utility
Companies

24. Additional Incentives & Programs
• Public Utility
Rebates
• Insurance
Savings
• State and Local
Rebates
Visit www.dsireusa.org for clickable map
and a listing of all Federal, State and Local
incentives for energy improvements

25. Recap: EPAct 179D
For Commercial Buildings 2006-2013 (New Buildings & Renovations)
- Private Buildings (Benefits - Owner / Tenant)
- Public Buildings (Benefits - Architect/ Engineer / Contractor)
- Lighting | HVAC | Envelope (Roof / Windows / Insulation)
$.60 $.60 $.60 = $1.80 per SF
$100k SF = $180,000
- Model vs. ASHRAE 2001 90.1 (16 2/3% Improvement)
- Business Development Strategy (Value-Added Info)

26. About Cotocon’s Tax Services
TCG marries the science of engineering with the
principles of tax and accounting utilizing innovative
financial strategies resulting in increased cash flow,
minimized tax payments and increased ROI. These
IRS approved services include Cost Segregation
Studies, Energy Tax Credits, 179D Deductions and
Historical and Brownfield Development Credits.
The Cotocon Team
Tel: 888-98-COTOCON(26862)
jimmy@thecotocongroup.com
www.thecotocongroup.com