Reducing energy use is essential for both the environment and the success of your business, and one of the most effective ways to do this is by switching to LED lighting. LED, or light emitting diode, lighting uses only a fraction of the energy traditional bulbs do to produce the same amount of illumination. While converting to LED lighting will save money in the long run, finding the initial budget allocation can sometimes stop a project before it even starts. If you’re looking to upgrade your building’s efficiency but aren’t sure where to get the money, consider the following resources.
Federal Tax Incentives
The Federal government has a number of incentives encouraging both businesses and individuals to lower their carbon footprints. Chief among these for businesses is the Tax Deduction for Commercial Buildings, a provision of the Energy Policy Act of 2005. Under this legislation, the owners and lessees of commercial buildings can deduct from their taxes the cost of improvements to their offices that boost energy efficiency. This includes the installation of LED lighting. You can deduct 60 cents for every square foot of your building where you reduce energy costs by at least 16.7 percent, and $1.80 for every square foot where you reduce it by at least 50 percent. To be eligible for this deduction, you have to obtain official certification proving that you achieved the aforementioned energy savings.
State & Local Subsidies
In addition to the Federal government, your state, county, and municipal governments likely offer similar benefits for LED installation. Specific incentives vary based on where you do business, but are often sizable. In North Carolina, for example, businesses that install efficient lighting can receive a rebate of 30 cents for every watt of energy that they save. Likewise, in the city of Garland, Texas, businesses receive a $100 rebate for every kilowatt they conserve. By combining state and local benefits, you can quickly recoup much or even all of the cost of a lighting upgrade.
Besides subsidies and tax credits, businesses that invest in LED lighting can borrow money on favorable terms to fund the project. One option currently rising in popularity is Property-Assessed Clean Energy, or PACE, programs, which allow businesses that own their facilities to borrow money against those properties. You can then invest that money in LED retrofits or upgrades and any other energy efficiency improvement projects. PACE loans have low interest rates and flexible repayment schedules and since properties are only eligible for PACE program loans if the estimated yearly energy savings is less than the loan payments, after interest, repayment is as easy as it comes.
XtraLight LED Lighting Solutions is a proud PACE Partner for businesses of all types. We help retailers, manufacturers, auto dealerships, schools, and countless other organizations plan and finance projects to save energy, water, and other natural resources. Our goal is to preserve the environment while simultaneously helping businesses cut costs and stay profitable. For more information on installing and financing LED upgrades, contact XtraLight today.