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Tax Reform = Energy Management

As the elections season begins, tax reform is quickly becoming a national focus. With support from both the democrats and republicans legislation should be introduced next year. Simplifying the tax code and eliminating many credits and deductions should be on tap. Tax reform provides us with an opportunity to remove barriers to efficiency investments imbedded in the current tax code and to use the tax code as a tool to support more efficient energy management in the future more than current provisions do.

ACEEE, American Council for Energy-Efficient Economy has begun laying the groundwork for tax reform and energy efficiency with a series of papers. This week they released the second in the series entitled Modifying How Energy Costs Are Treated for Business Tax Purposes in Order to Remove Barriers and Increase Energy Efficiency.

Currently the tax code does not encourage real energy savings by businesses. Since energy bills count as a business expense and are subtracted from the total amount of taxable income, effectively, the federal government is typically “paying” 25% of business energy costs (based on the average effective business tax rate of about 25%). Subsidizing energy costs enables higher energy consumption.

When a firm makes capital investments, these expenses must be depreciated, meaning they are only recovered gradually. In the meantime the firm must carry the un-depreciated value on its books, which can reduce the incentive to make investments.

ACEEE suggests that the tax code should be structured to encourage businesses to reduce energy consumption instead of encouraging energy waste. They suggest three new ways to treat business energy costs in the tax code. The first way would shift business taxes to focus on income, not expenses as the federal income tax does. Tax 3-4% of the revenue instead of the current tax that taxes the profits at about 25%. The second approach is also simple it would eliminate deductibility for just energy costs, although partial deductions would still be allowed for firms with very high energy costs as a percent of revenues, in order to not put these firms at a disadvantage in international trade. The third, more complicated, approach would reward businesses that operate with below-average energy costs relative to the average in their industry, while penalizing businesses that consume large amounts of energy. The paper included examples to illustrate how each of these options might work.

The options presented in this paper would reduce the need for specialized tax incentives currently in place energy efficiency while simplifying the tax code. The ACEEE realizes that tax code reform is not all about energy efficiency but feels we should use the code to encourage business to improve their energy management systems.

Advanced Control can help your business reduce its energy consumption right now! As a leader in building automation, access control, system integration and CCTV systems and service in South Florida, Advanced Control has the expertise to get your company energy efficient. If you are interested in improving your energy management system, contact our specialists today at 954-491-660.

Daylight Savings Time- Energy Savings?

Spring Ahead, Fall Back- we all know the routine. Daylight Savings Time started again on March 4^th at 2am. One of the biggest reasons we change our clocks to Daylight Saving Time (DST) is that it reportedly saves electricity. Newer studies, however, are challenging this idea.

Energy use and the demand for electricity for lighting our homes is directly related to when we go to bed and when we get up. In the average home, 25 percent of all the electricity we use is for lighting and small appliances, such as TVs, computers and stereos. A good percentage of energy consumed by lighting and appliances occurs in the evening when families are home and up. Daylight Saving Time “makes” the sun “set” one hour later and therefore reduces the period between sunset and bedtime by one hour. By moving the clock ahead one hour, we can cut the amount of electricity we consume each day. We also use less electricity because we are home fewer hours during the “longer” days of spring and summer. Most people plan outdoor activities in the extra daylight hours. When we are not at home, we don’t turn on the appliances and lights.

Although the amounts of electricity saved per household are small – they add up. Studies done in the 1970s by the U.S. Department of Transportation show that we trim the entire country’s electricity usage by about one percent each day with Daylight Saving Time.

In May 2011 a report by the California Energy Commission recommended that going to a year- round DST could help with the electricity problems of that state.

A report was released in May 2001 by the California Energy Commission to see if creating an early DST or going to a year-round DST will help with the electricity problems the state faced in 2000-2002 Winter DST would cut winter peak electricity use by around 3.4 percent. Summer Double DST would cause a smaller and more uncertain drop in the peak, but it could still save hundreds of millions of dollars because it would shift electricity use to low demand (cheaper) morning hours and decrease electricity use during higher demand hours.

A 2008 report from the University of Santa Barbara concludes that Daylight Saving Time in Indiana actually increases residential electricity demand. It looked at the part of the state that did not observe DST. Now the whole state observes DST. After reviewing this report the state of California does not believe its findings would hold true in California or the rest of the country as Indiana uses little residential air conditioning in the summer, Indiana is located in western edge of the same time zone as Maine and Florida, but the sun actually comes up at an earlier time than those other two states and Indiana’s north-south location will affect how long the days are in the summer and might very well lead to different results in different areas of the state.

We do know for sure that turning off lights, appliances and air conditioning does save electricity and money any time of the year. Lights left on in an unoccupied office building are a waste of resources and money. Advanced Control Corporation provides the ability to expand your building automation system to include lighting control for your building. The range of control can be from a basic control system for lighting and equipment switching applications which are ideal for use in facilities where time-of-day control is being managed from a time clock or centralized building management system to a fully automatic lighting control for all of your facilities lighting circuits. Advanced Control Corporation implements a proven strategy for superior energy management with tools and resources to help each step of the way. If you are interested and finding out more information about lighting control and energy management contact Advanced Control Corporation at 954.491.6660 today!

Companies Stepping Up Energy Efficiency Measures

Green practices, including energy management, are becoming a growing trend among many companies today, according to the fifth annual “Energy Efficiency Indicator: Global Results” survey. They have shown increased interest in energy efficiency, which is most likely due to increased incentives for adopting these more efficient practices, as well as a desire to improve the company’s public image. Continue reading “Companies Stepping Up Energy Efficiency Measures” »

Building Automation – The Next Big Thing in Green Technology

The building automation market is projected to take off in the next few years, thanks to the overall interest in energy efficient technology. Companies nationwide are converting and replacing, and commercial automation in particular is being touted as the next big boom. Several factors go into why the movement towards building automation is taking place, but none more obvious than the many economic incentives. With the country being in recovery, everyone is focused on the bottom line, and energy efficiency has become one of the largest money saving practices in which a business can participate. Along with tax incentives, the long term energy costs savings are well worth the investment to automate and/or integrate. As a result, more and more buildings are being built to LEED (Leadership in Energy and Environmental Design) standards.

LEED certified buildings saw a 14% growth in 2010, and profits from energy savings are only forecasted to increase in 2011 as technology gets more energy efficient and less expensive. Recently, at the U.S. Green Building Council’s Expo in Chicago, Retired Gen. Colin Powell stated that IT is the answer to get to the next level of energy conservation. It seems building automation technology is on the right track, with application price points going down, and devices getting smarter and providing more control. All technology is geared towards operating on one platform; system integration is what is happening now in the industry. No one would design a space that did not have all controls on one network. From large building automation systems to small, everyone is taking the steps to crossover.

Advanced Control Corporation is knowledgeable and adept at installing the latest LEED friendly technology tailored to your building. Advanced Control Corporation offers building automation in South Florida, is a member of the U.S. Green Building Council and continues to demonstrate leadership in providing energy efficient products and services. For more information, and to learn how we can make your building more energy efficient, call 954-491-6660.

Upgrading Control Systems

In this economy, justifying overhauling the control systems of a building can be a difficult task. However, no matter how advanced the technology, time takes effect and systems can no longer perform, in turn affecting the productivity of its occupants. Problems can be varied, and most aging system controls have less to do with functionality and more to do with the current technological standards. Experts suggest categorizing your company’s building control systems upgrades, such as, “more energy efficient.” Another way to lighten the financial load of a control upgrades is to do them in installments, which is a more affordable option for universities or medical campuses that have multi-building sites.

How do you know when your building needs system controls upgrades? Well here are a few questions you should answer in order to put the state of your system in perspective:

1. Is your existing control system obsolete and creating productivity problems for the building or security breaches?

2. Is your building being penalized financially for the aging or obsolescence of the system’s controls?

3. Is there a new energy standard being implemented? More cost effective LEED?

New controls and automation systems in general do not have to break the bank, but can do just the opposite. Energy efficiency and standards for control systems are today’s focus, and it is becoming a requirement, as it should, for designers and engineers alike. New controls can save electrical energy, as well as human energy exerted by the facility’s occupants or staff, providing a service of greater productivity on both levels. Establishing these types of upgrades and implementation is paramount to enable the company or building’s effectiveness in 2011.

Advance Control Corporation can aid in this process and provide services to start this year off in the right direction for your company or building.