Tax-Saving/Energy-Saving Buildings

Are you a property owner or are you considering buying or constructing a new building?  Are you a tenant, in need of expanded or repurposed space?  Are you interested in installing more energy efficient systems to help save on your operating costs?  Has the economy of the past few years forced you to put off these plans?  Well, a tax benefit hidden within the Energy Policy Act of 2005 (EPAct 2005) might help soften the blow of the cost of these improvements, while saving on energy and maintenance costs! 

More specifically, Section 179D can make it worthwhile for a building owner or tenant to make improvements to their lighting, HVAC or building envelope.  Do I have your attention?  I hope so, because not many people seem to know about this, and you can earn a tax deduction for any new building or renovation completed between 2006 and 2013 that exceeds the 2001 energy code requirements.  How hard is that, given that the code has become significantly more stringent in the past ten years?  

The maximum deduction available under Section 179D is $1.80 per square foot for projects that exceed the overall code requirements by 50% or that meet the individual criteria for these three categories ($.60 per square foot each).  While the HVAC and envelope incentives are awarded on an “all or nothing” basis, partial deductions are available for lighting, ranging from $.30 to $.60 per square foot.  If your lighting meets today’s code, you can be sure that you’d be able to claim at least a partial deduction.

For private owners and tenants, this deduction applies to all types of commercial buildings including hotels, retail stores, parking decks, office buildings, etc as well as apartment complexes of more than four stories.  However – and now I’m talking to the architects, engineers, and others responsible for the design of these buildings – deductions are available for publicly-owned buildings as well!  In that case the deduction goes to the members of the design team (architect, engineer, and/or lighting designer) responsible for specifying the energy efficient systems. 

Meeting the criteria for the deduction requires the participation of an accounting professional as well as an engineer who was not involved in the project design.  The engineer is responsible for the review and evaluation of project documents and preparation of the required third-party documentation, including energy modeling.  The accountant is, of course, responsible for preparation of the appropriate IRS documentation.

Particularly in these difficult economic times, EPAct 2005 offers opportunities for an owner or tenant to move forward with a project that has been stalled due to concerns about cost.  For public projects, it can help design firms offset some of the losses they’ve suffered in reduced fees and expanded project schedules, which are side effects of the financial crisis.  In either case, making it possible for new projects to move forward is a win-win for everyone involved, including the employees, residents and guests of the spaces they build.

This article will appear in the December 2011 issue of the Sobel & Co. newsletter.  
Check back here for a link to the newsletter when it is published.

The IALD takes New Orleans

New Orleans Streetcar - Note the LED Headlight

The IALD Enlighten Annual meeting is one of my favorite yearly events.  It is one of the few times in the year where designers and manufacturers with a love of lighting design gather together to talk about light, period, no sales, no products.  Just fantastic discussions with wonderful people.

This year the meeting took place in New Orleans, a city I somehow have never managed to visit before.

The four days at the conference were filled with a wide array of experiences and topics, a few of the highlights:

This year there was a large group of energetic and incredibly bright students attending the meeting.  Most of them had at least some of their costs offset by the IALD Education Trust.  

I am always blown away by how engaged and excited these students are for the world of lighting.  That the industry is attracting such bright people is a real positive sign for its future.

In addition to the students, there was a large contingent of Emerging Designers in attendance.  Emerging Designers are people with less than five years in the industry and they too brought a fresh and new perspective to many of the discussions.  A real plus in having them there.

With seminar tracks ranging from design, to business principles  to marketing there is a wide range of issues covered over the three days, but personally, my favorite event is the Town Hall Meeting held at the end of the last day.

The Town Hall provides an open forum that can cover a huge range of issues that are important to lighting designers.  This year’s topics ranged from energy codes, to client relations and collections to having enough “sexiness” in your designs.  

It’s a unique opportunity for the exchange of ideas, and provides plenty of chances to laugh, agree with and disagree with your colleagues.

Corn Stalk Fence in the Garden District

Very crowded tomb in the Garden District

As for New Orleans itself, my brief three day experience presented a study in contrasts in my perspective on the city.

On the one hand there was the elegance of the grand homes in the Garden District, the nostalgic experience of riding an open air trolley across town, the history and architectural interest in the tombs in the cemetery I visited and the wide array of art found in the galleries of the French Quarter.  

However, the charm and interest of these areas was often contrasted by the obvious poverty and decay on display all over town.  With down and out individuals around every turn, it was sometimes hard to believe you were in a city in the U.S., never mind one so important to developing so many aspects of our music and culture.

The city certainly still needs the attention of the rest of the country in order to return to its grander days.  Perhaps as the economy turns and opportunities for new projects and infrastructure emerge, New Orleans will benefit from some much needed attention.

For me, overall, it was a fun, productive and educational three days in the Big Easy.  Very much worth the visit.

LED's for General Lighting

LED lighting has become a buzz word within the world of architecture and design.  Not a project goes by where we don't discuss LED light sources.

However, LEDs are still in their infancy.  The lack of standards, control concerns and other issues bring caution to our discussions with clients and owners about this incredibly compelling technology.

Illumination Arts has spent several months compiling all the latest information on LED luminaires and their use for general lighting.  We have compiled this information into a white paper titled " LED General Lighting - Are we there yet?", that you can read or download from the IA website by clicking here .

Feel free to let us know your thoughts, comments or questions.

Welcome to the Ilumination Arts Blog

Ken and I recently decided it was time to jump into the Social Media world with both feet.  With help from a fabulous social media guru (TC Coleman of Upward Action), we opened and populated accounts on FaceBook, Twitter, YouTube and Flickr, and it seemed that we were saturating the “airwaves,” albeit slowly and deliberately.  But with all that, we still felt that we had no “voice,” no way to actually talk in a leisurely and thoughtful way about lighting, the built environment industry, or other topics that might be of interest to us and our colleagues, friends and clients.

So, I welcome you to the very first of IA’s blog posts. 

Where do I begin?  As with most things, it’s possible to overthink this, so I’m going to pick up right here in the middle, with some words about an article I saw recently in the Washington Post.

“In light-bulb business, lumens try to power past watts” (http://www.washingtonpost.com/wp-dyn/content/article/2011/01/30/AR2011013004537.html?sid=ST2011013100409) was a story about the attempt to reframe the conversation about lighting, particularly for a lay audience, by referring to lumens (brightness) instead of watts (power) when categorizing a lamp (light bulb).  And I hope I’ve made my point.  The article made me realize the degree to which our industry jargon (and that’s any industry, not just lighting) is so natural to us that we don’t realize how completely foreign it is to outsiders.  (The Post even made fun of the lighting industry’s use of the word “lamp.” Harumph.)

But it makes so much sense!  How can we still speak in watts, when that information is irrelevant to the amount of light emitted by a source?  So, we need to forget the metric debacle, and find a successful way to get people to think in lumens instead of watts. 

According to the article, the federal government has launched LUMEN (Lighting Understanding for a More Efficient Nation) to lead us into the future, but the group has yet to be funded, and the only information about it on line is the document outlining its structure. I’m anxiously awaiting more news about LUMEN, and hope that the lighting design industry puts its full support behind this effort.

Faith

Project Tour

IA Principal Faith Baum will be leading a tour of her design for the Peddie School Athletic & Aquatic Center on March 15th, sponsored by the New Jersey Section of the IESNA.

Click here to view the invitation.