What is ComCheck?

COMcheck is a set of materials (software, manual code compliance, and reference guides) produced by the Department of Energy, designed to simplify and clarify commercial and high-rise residential energy code compliance. Forms and checklists are included for documenting compliance.

What states are eligible to use COMcheck?

This map shows COMcheck eligibility by state. Clicking on a state will take you to the Department of Energy’s state status page, which has information on energy code enforcement and compliance, as well state resources, special initiatives, and contact information.

Why do we offer this service?

Many states require an engineer’s stamp to proceed with new building. By using our service, you decrease your time investment- we assure the project meets guidelines and give approval at the same time.

What do we need from you?

To complete your report, we need either:

1. Drawings or
2. Square footage and equipment schedule.

What is the average turnover time for a report?

3-5 business days is the average turnover time.

As the owner/administrator of a business, you don’t have the time to wade through all the rebate opportunities available to you. DAE can help. We will find all utility incentive programs that your project qualifies for, from local and state utility rebates to federal tax refund programs.

Utility Incentive Programs for Energy Conservation – Grants and Rebates

Design-Aire Engineering’s (DAE) Energy Services division will find utility incentive programs to reduce the total project cost of the energy conservation measures in the energy audit and thereby reduce the overall project payback.

Grants

U.S. Department of Agriculture (USDA) offers energy efficiency grants up to $250,000 and $500,000, respectively for energy conservation measures in private correctional facilities.

Some states offer grants for alternative energy up to $500,000 for solar and wind projects that generate reduce electricity or natural gas consumption.  For example, Wallkill Correctional Facility in New York state received a grant for 78% of a solar project that will reduce the cost for domestic hot water by over $16,000/yr.

Rebates

Most electric and gas utilities offer rebates up to ($20,000) for energy conservation in lighting, heating, ventilation, air-conditioning, domestic hot water and/or building improvements in private or government correctional facilities.

Rebates:

• $/lighting fixture
• $/boiler MMBtu
• $/sqft
• $/therm saved

 

Tax Deduction

The Energy Policy Act of 2005 (EPAct) allows a tax deduction up to $1.80/sqft or the total project cost whichever is less for energy efficient interior lighting, heating ventilation, air-conditioning (HVAC), and building envelope systems in existing or new construction. EPAct allows the purchaser of the equipment, landlord or tenant, to recoup some of the cost during the early years of putting them into service, rather waiting the 39.5 years before depreciation. The EPAct’s extra initiatives in implementing efficient building systems serves to reduce our dependence on foreign fuel sources and improves industry competitiveness via lowering the cost of doing business.

What is EPAct?

House bill 1331-6 is a wide-reaching bill that primarily promotes energy efficiency in commercial and industrial facilities. To qualify for the deduction, building owners must take specific steps to document the process.

What qualifies a corporation for a tax deduction under this new law?

There are three main areas to which House Bill 1331-6 can be applied to qualify for a tax deduction; these are lighting, heating and ventilation, and building envelope improvements. A project that improves or replaces existing interior lighting or HVAC systems, and reduces energy use by 50% (as compared to an ASHRAE 90.1 base design building), may qualify after meeting certain criteria in the house bill. Tax deductions are also possible for building envelope improvements, such as additional wall and roof insulation, skylights for natural lighting, high efficiency windows, and reduced infiltration.

What types of buildings qualify?

Any commercial buildings or portions of buildings, including: manufacturing, warehouses, offices, retail, hotels, parking garages, banks, schools, apartment buildings taller than three stories, courthouses, town halls, and libraries. Churches and similar buildings do not qualify. Energy-efficient commercial building equipment is defined as property that is:

1. Installed on or in any building located in the United States that is within the scope of ASHRAE/IESNA Standard 90.1 (2001);
2. Installed as part of (i) the interior lighting systems, (ii) the heating, cooling, ventilation, and hot water systems, or (iii) the building envelope; and
3. Certified as being installed as part of a plan designed to reduce the total annual energy and power costs of interior lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more when compared to a reference building, which meets the minimum requirements of Standard 90.1-2001.

What is the effective date for taking advantage of this tax deduction?

The provision is effective for property placed in service after December 31, 2005, and prior to January 1, 2017.

What steps must be taken from an engineering perspective to certify and claim such a tax deduction?

We recommend that a building owner hire a professional consulting engineer before expenditure of funding to review the overall project and develop the following:

1. Determination of whether the project meets the benchmark energy savings detailed in House Bill 1331-6. The structure must be compared to an ASHRAE 90.1 base design building using a modeling program authorized by the Department of Energy.
2. A “Certificate of Compliance”, supplied by the Federal Government, properly completed and signed by the professional engineer.
3. A letter detailing the scope of the project with attachments that support the expenditure and project cost. The process of qualifying a particular project is an engineering function that is based on the owner’s building specifications as compared to the type of system suggested and an ASHRAE 90.1 base design building.

Why should a consulting engineering firm be involved in this process?

This is a technical process that requires a technical approach. The development of a computerized modeling program and the actual certification must be done by a professional entity to quantify the expected savings in an objective manner. Additionally, the Engineer brings to the project an impartial view of what options are available to the client for improving his building operating costs. It would be a missed opportunity for a company to expend the funds to upgrade their equipment or systems, and then find the savings doesn’t meet their expectations, or to find out a significant deduction was not obtained due to lack of knowledge about the EPAct 2005 program, or due to improper documentation of the project.The building owner initiates the process of obtaining his tax deductions by using the services of a professional familiar with his building plan, the sophisticated techniques of building computer simulation, and procedures necessary for quantifying and documenting the tax benefits provided by EPAct 2005. The findings, which include the Consultant’s Letter of Project Overview, the Certificate of Compliance, and savings documentation, are then communicated to the other member of his team: the building owner’s accounting firm. He then uses this information to process the tax deduction as part of his preparation of the owner’s annual tax documents.

EPAct and Taxes

• What are the limits on this tax deduction?
• What part of my project cost can be written off?
• Does the whole building have to be deducted, or are partial deductions allowed?
• After deductions, how is the rest of the property value handled?

What are the limits on this tax deduction?

The deduction, allowed in the year the project is finished, is limited to $1.80 per square foot for interior lighting, HVAC, and building envelope improvement or the total project cost, whichever is less. The project must qualify in the areas detailed in the House Bill. The deduction is limited to $0.60 per square foot for interior lighting and HVAC or building envelope improvements. Deductions for renewable energy sources may be available.

What part of my project cost can be written off?

Any cost related to the project, including labor, may be written off.

Does the whole building have to be deducted, or are partial deductions allowed?

A partial deduction is allowed if the whole building does not meet the 50% energy savings requirement. Any system certified by a professional to have met the requirement may be deducted. In this case, however, the maximum benefit is $0.60 per square foot.

After deductions, how is the rest of the property value handled?

The basis of the property is reduced by the deducted amount. The remaining value is depreciated as normal.

Lighting Information

• Why upgrade my lighting system?
• What types of lighting systems are eligible?
• Is bi-level switching required?
• Should the maximum wattage of a fixture be used in calculations?

Why upgrade my lighting system?

First, lights are easily upgraded and the equipment is readily available. Second, the energy savings are well known and high return. The energy reduction target for lighting is 40-50 percent of the minimum ASHRAE requirement, depending on building type. Partial deductions of $0.30 per square foot are allowed if the target deduction is not reached. Other requirements for interim lighting may apply.

What types of lighting systems are eligible?

To be considered for the deduction, the lighting must meet ASHRAE’s “permanently installed” requirements. ASHRAE 90.1-2001 defines this as “equipment that is fixed in place and is not portable or movable”. Lighting technology types are not specified in Bill 1331-6.

Is bi-level switching required?

It is included so that the lighting-only interim provision would result in an overall energy reduction. Typically, bi-level switching can reduce power input by 10-15% annually. It also reduces load on the HVAC for many building types.

Should the maximum wattage of a fixture be used in calculations?

The wattage used in calculations depends on the type of lighting technology. Lighting manufacturers and designers will be able to assist you in determining wattage best suited for your needs.

HVAC Information

• Do new or retrofits to existing heating, ventilation, and air-conditioning (HVAC) systems qualify for an EPACT tax deduction?

Do new or retrofits to existing heating, ventilation, and air-conditioning (HVAC) systems qualify for an EPACT tax deduction?

Yes, if the proposed HVAC system reduces overall energy cost by 16-2/3% compared to the same building with a HVAC system compliant with the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 90.1 (2001).

Building Envelope Information

• Do new or retrofits to existing building envelope systems such as windows, doors, roof and/or wall insulation qualify for an EPACT tax deduction?

Do new or retrofits to existing building envelope systems such as windows, doors, roof and/or wall insulation qualify for an EPACT tax deduction?

Yes, if the proposed building envelope system reduces overall energy cost by 16-2/3% compared to the same building with a building envelope system compliant with the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 90.1 (2001).

Other

• Are recycling costs deductible?
• Are exit signs eligible?
• Are screw-in compact fluorescent lamps an accepted alternative to incandescents?

Are recycling costs deductible?

Yes.

Are exit signs eligible?

No, they are not allowed in the lighting power allowance under ASHRAE 90.1-2001.

Are screw-in compact fluorescent lamps an accepted alternative to incandescents?

No, the ASHRAE 90.1-2001 lighting power calculations are for maximum labeled wattage of incandescent lamps. Screw-in CFLs cannot be used to reduce wattage for purposes of the deduction.

Please click here for DAE’s EPAct Brochure.

Cost Segregation

Cost Segregation is the process of identifying and separating the elements of a building into asset classes for greater tax depreciation benefits.

This strategic tax planning tool allows you to increase cash flow and accelerate your federal and state income tax depreciation deductions on facilities you have purchased, constructed, expanded, or remodeled, including landlord or tenant improvements.

A Cost Segregation Study identifies building systems that are directly used in producing a product. DAE will identify property that can have a shorter depreciable tax life, as well as the portion of utility bills that are tax exempt. These changes reduce taxes and increase cash flow.

Accelerated Depreciation:  Any mechanical, electrical, and plumbing construction costs, necessary for producing a product that are above and beyond what would be needed for a basic building, can be depreciated over a shorter period.  For example, wiring, fans, starters, and other items can be depreciated over a 7-year period, rather than the customary longer period (39-1/2 years) for a typical building.  Similarly, driveways, sidewalks, and landscaping can also qualify for accelerated depreciation.

Sales Tax forgiveness:  Another use of a Segregation Audit involves separating out the utility costs used to produce a product versus basic building use. The benefit in doing this is that utility costs to make a product are not subject to sales tax.  By separating out, considerable savings to a client can occur.  Applications for this type of audit would include analyzing the cost to heat and cool ventilation air for a restaurant, and electric motors needed in a manufacturing facility.

For 30 years, DAE’s professionals have focused on helping facilities improve their efficiency by reducing energy costs and tax burden. We would welcome the opportunity to assist you with your project. DAE utilizes an engineering-based approach to cost segregation studies from the expertise of our professionals in engineering, accounting, and cost segregation.

Energy auditing services show customers where they can save the most money on energy expenses. DAE’s audit program saves between 10-40% of the annual energy expenses for most businesses, and typically has a payback of less than 2 years. An energy audit from DAE analyzes your current energy use and provides recommendations on energy savings and efficiency.

Energy Audit Process:

Step 1: Survey and review of energy bills

Complete our short survey.

Step 2: Energy bill submittal

Submit all energy bills for the past 12 months, excluding water.

Step 3: Preliminary site visit

DAE will arrange a visit to view the facility. This site visit is to acquire an overview of the building’s use.

Step 4: Proposal

DAE will prepare a proposal for the approval of the authorizing officer of the organization. The proposal includes a summary of the audit work to be completed and pricing information. Once signed, the proposal is a binding contract. Partial payment (the terms of which are disclosed in the proposal) is due upon signing of the proposal. It is useful if building plans (footprint, electrical and mechanical schedules) are made available to Design-Aire Engineering, Inc. at this time.

Step 5: Secondary site visit

DAE’s audit team completes a thorough secondary site visit and energy interview. The team will complete a full equipment inventory, including all major energy-consuming equipment and lighting, and take photographs of the building. DAE follows all safety and security requirements and can be escorted, if necessary.

Step 6: Information analysis

The information obtained from the energy bills, energy interview, and site visit is compiled by our staff of professional engineers for analysis.

Step 7: Publish report

Recommendations for energy conservation measures, including an overall summary and explanations of each measure with graphs, charts and tables, are presented in a clear, concise format for review. The client is provided with two copies of the report. An additional copy may be furnished to state government, if required.

Step 8: Review with client

A member of the DAE audit team reviews the report with the authorizing officer, either in person or by conference call, to discuss the recommended measures and answer any questions.

Step 9: One-year energy partnership

DAE is available to the organization for a full year following the audit process to address energy-related questions or concerns.

View a list of equipment typically evaluated in an audit.