Energy Policy Act of 2005 (EPACT) Federal Tax Deduction for Energy Efficient Lighting
The Energy Policy Act of 2005 (EPACT) includes a tax deduction for energy efficient buildings systems up to $1.80 per square foot for buildings that generate energy savings relative to a “Baseline” building as determined by ASHRAE 90.1-2001.
The whole building may qualify for up to $1.80 per square foot ($0.60 per measure) based on implementing energy efficient measures for:
1. Lighting systems
2. HVAC or Water Heating
3. Building envelope.
Each measure may qualify for up to a $0.60 per square foot deduction for their contribution to the 50 percent savings (defined by the Internal Revenue Service as 16 2/3% whole buildings savings).
Lighting may receive up to a $0.60 per square foot tax deduction for reductions in lighting power density from ASHRAE 90.1-2001 baseline.
Rules for Lighting Systems
EPACT 2005 establishes interim rules for lighting systems effective until the issues the regulations defining the energy-savings target for lighting systems are issued. The Interim Rules for Lighting Systems define the lighting system energy-savings target to be a lighting power density (LPD) that is 25-40% lower than the minimum requirements under the Building Area Method or Space-by- Space Method) (not including additional interior lighting power allowances) of Standard 90.1-2001. For warehouses, the lighting power density must be 50% lower than the minimum requirements of Standard 90.1-2001.
Besides demonstrating a reduction in lighting power density, all controls provisions in the Standard must be met, bi-level switching must be installed for most buildings, and the application must meet the minimum recommendation for calculated light levels as set forth in the 9th Edition of the IESNA Lighting Handbook.
Compliance with all requirements of ASHRAE Standard 90.1-2001 (without amendments)
- Mandatory Controls
- Interior Automatic Light Shutoff (e.g. motion sensor, timer, or EMS in all areas)
- Interior Space Control (e.g. individual switches in enclosed rooms)
- Exterior Photocells or Astronomical Timer
- Maximum Lighting Power Density allowances
- Install Bi-level switching in most areas (see below for exceptions)
- Meet minimum IESNA recommended light levels for the tasks performed in the space
Maneri~Agraz will design your new lighting system to maximize the EPACT tax deduction, certify your project as EPACT compliant, and provide As-Built documentation for your Accounting Department.
