Incentives and Programs

A huge energy savings potential remains untapped in public buildings. With budgetary challenges and energy costs rising, managers of public buildings must pare down all wasteful expenses, and energy is a prime candidate. To significantly curb energy costs, an on-going energy efficiency program needs to be adopted that will actively set policy and ensure compliance.

Currently, the Arkansas Energy Office does not have any grant funds or incentives available for energy efficiency improvements on public buildings. Contact your local utility for energy audit services, incentives, rebates and beneficial rate schedules. See links and resources.

On the Federal level, the 2005 Energy Policy Act provides for a business tax credit for either the owner and or design professional when meeting the energy efficiency criteria. A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems.

For publicly-owned buildings, the tax deduction can be assigned to the designer of the building. A public agency could assign the credit to the building designer, negotiate a fee reduction and so realize the credit in that way. Designers are defined by IRS Notice 2006-52 as "a person that creates the technical specifications for installation of energy efficient commercial building property...for example, an architect, engineer, contractor, environmental consultant or energy services provider... A person that merely installs, repairs or maintains the property is not a designer."

Congress Extends Energy Efficiency Tax Incentives

On Oct. 3, 2008, the President signed into law legislation to extend many of the Energy Efficiency Tax Incentives first enacted in 2005 but that expired at the end of 2007 or that were scheduled to expire at the end of 2008.  The bill also includes extensions of a variety of renewable energy tax incentives.  The energy efficiency provisions include an extension of the commercial buildings tax deduction to the end of 2013.