Tax Incentives for Green Energy Purchases

The “Worker Homeowner and Business Assistance Act of 2009” was introduced by the federal government in November 2009.  Intended to stimulate the economy by providing tax relief for both businesses and homeowners, the Act modifies how businesses can carry Net Operating Losses (NOL). 

NOL refers to deductions granted for expenses that surpass a company’s gross income. Previously businesses could carry their NOL for only three years, but the Act extends that period to five years.  NOL-eligible companies may be entitled to quick tax refunds that they can spend on energy improvements. 

Meanwhile tax breaks for “green energy” improvements encourage business owners to invest in upgrades that make both structures and equipment more environmentally friendly:

• Adding or replacing insulation
• Upgrading old windows to energy-efficient ones
• Installation of LED lighting
• Placement of environmentally friendly energy sources

Initially these tax breaks were to be offered only through the end of 2008.  However, due to the current financial crisis, the federal government opted to extend the tax credit program.  The program will continue only until the government runs out of funding for the program.

Advantages of Investing in Energy Improvements

Given the current economic incentives for investing in green energy improvements, now is really the best time for businesses to invest in energy improvements.   Although the tax credits themselves are an excellent reason to go green, the long-term savings afforded by energy optimization are also excellent. 

• By decreasing electrical waste directly from the breaker, energy optimization increases overall energy efficiency.
• Replacing current appliances with energy efficient ones can drastically decrease power bills for the entire lifetime of the appliance.
• Energy-efficient lighting produces less heat and uses less electricity, for amplified savings. 

Because these government programs were instituted in the interest of economic stimulus, they have a limited life span.  Business owners who want to benefit should take advantage as soon as possible.

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Replace major appliances with energy-efficient models.  Energy-efficient appliances are usually more expensive up front.  However, they quickly pay for themselves through energy savings—and recently introduced tax breaks for green home improvements. Although most homeowners think to upgrade their refrigerators, washers, and dryers, they often overlook the hot water heater. Yet this appliance usually accounts for at least 25% of residential electricity usage. Even older hot water heaters can be retrofitted with a device like the AirTap, which uses heat pump technology to reduce energy use by up to 70%, without sacrificing temperature or capacity. 

Install efficient lighting throughout the house.  From Compact Fluorescent Lamps to LED bulbs, the array of energy-efficient lighting options makes it possible to replace virtually every incandescent bulb in the house.  While lighting accounts for approximately 60% of the average electric bill, traditional lightbulbs use only about 5% of the energy used to produce light. The other 95% escapes in the form of heat—which can even drive up cooling costs during the summer! Replacing these inefficient bulbs with their environmentally friendly counterparts reduces lighting energy costs by up to 80%.

Improve overall energy efficiency with electrical current optimization.  Every electrical system runs on electrical current, measured in Amps.  As energy is transferred throughout the home, much of it actually wasted; the average residential electrical efficiency registers at 85%.  A power factor correction unit improves that efficiency rate.   This device can be installed directly on the breaker box for year-round energy savings.

Protect equipment from electrical damage.  Electricity is a vital part of daily life, but it can also be dangerous.  Power surges may occur due to lightning strikes, downed power lines, or even routine electrical maintenance.  A surge can severely damage electrical equipment, especially more delicate items like computers and televisions.  To protect the whole house, homeowners can install a surge protector like the V-Blox House Surge Protection Unit.  The device easily installs to the electrical panel.

Practice energy-efficient habits.  Energy savings requires daily awareness of electricity usage.  The right equipment creates an energy-efficient infrastructure.  To complement that foundation, homeowners should practice responsible usage, such as turning off lights in empty rooms and unplugging unused phone chargers.  Homeowners can also improve their savings by routinely checking insulation and weather stripping.

For comprehensive energy savings, homeowners can combine energy -saving equipment, techniques, and habits.  This holistic energy optimization strategy significantly decreases homeowners’ electric bills and protects the environment.

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An Overview of Power Factor Correction

Power factor is the ratio of real power to apparent power used by a circuit.  When someone plugs an appliance into an electrical supply, the power factor varies based on the amount of electricity that the appliance requires.  That fluctuation causes instability in a home’s power grid and leads to wasted electricity. 

To reduce this waste and regulate the power factor, a power factor correction capacitor (PFCC) can be installed. The capacitor enables the electrical system to run more efficiently, so that less electrical input is necessary to power the home or business.

The device attaches to the main service entrance, the electrical panel, the equipment itself or all three, depending on the desired level of regulation.

Proper Installation of PFCC’s

If the main reason for correcting the power factor is to lower electric bills, the PFCC can be placed at the main service entrance.  This “fixed bank” approach improves the power factor and reduces electric bills.  But this method can also shorten the lifespan of the PFCC, particularly if the power usage varies daily.  

A better plan for homes and businesses where power needs fluctuate frequently is to place PFCC’s directly on the equipment itself, or to install an AutoTune system at the main service entrance or breaker box.  It is important to have a qualified professional assess individual building needs and build a corresponding strategy for power factor correction. 

Advantages of Power Factor Correction

Because power factor correction streamlines the function of the electrical system, it has multiple financial advantages for consumers and business owners:

• Reduced electrical usage, which lowers electric bills
• Elimination of power factor penalties on power bills
• Longer life for electrical appliances, reducing replacement costs
• Potential eligibility for green building tax credits and other government incentives

It is important to note that PFCC’s are not surge protection.  To maximize the benefits of power factor correction, it is best to pair PFCC’s with a comprehensive surge protection system, such as a Transient Voltage Surge Suppression (TVSS) unit. 

Consumers can use power factor correction to supplement their other energy conservation efforts.  The result will be added savings on electrical bills and longer life for electrical equipment.

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Complete Energy-Saving Home Maintenance

It’s never too late to prepare a home for winter.  Weatherproofing a home keeps the cold air out, and the heated air in. Homeowners who follow these energy-saving techniques will be well prepared to enjoy decreased energy expenses in every season.

• Check the exterior of the home for holes or gaps. Seal small openings with caulk, and patch larger holes with drywall or sheetrock.
• Inspect the weather-stripping around doors and windows.  If necessary, reapply caulk around the windows and replace the foam around doors.  Add sweeps to the bottoms of exterior doors. 
• Use window locks to keep windows sealed as tightly as possible.
• Clean heating equipment regularly, as clogs can decrease output.  Replace the filter furnace as needed. 
• Inspect insulation in the basement, attic, ceilings, and exterior walls to ensure that it reaches recommended levels.
• Cover the pool and run the filter for only two hours per day. 
• Place aluminum foil on the walls behind each radiator, to reflect heat back inside the room.

Since these measures seal the home, they cut energy costs for both heating and cooling the home.  Homeowners can take advantage of winter preparations to get year-round energy savings. 

Practice Energy-Conscious Habits

Once a home has been properly prepared for winter, residents can maximize savings by practicing conscientious energy use.   Enlisting the entire family in energy conservation builds money-saving habits that last all year. 

• Close the fireplace damper when the fireplace is not in use, to prevent chilly drafts from entering the house through the chimney.
• Adjust the thermostat to 68 degrees, or the lowest comfortable temperature.  For every two-degree adjustment, homeowners save approximately 2% of the electric bill.
• Switch light bulbs to LED lighting. Although LED light bulbs may require some up-front investment, they provide substantial long-term savings. 
• Whenever the house will be vacant, turn off the heat altogether.  This habit especially pays off if everyone is away at work or school during the week.
• During the day, leave curtains on south-facing windows open and take advantage of solar heat.  At night, close all curtains to insulate windows.
• Move furniture and curtains away from radiators, since they absorb heat that would otherwise heat the whole room.
• Close the vents and doors in unused rooms so that empty spaces aren’t heated unnecessarily.
• Turn off vent fans in the bathroom promptly.  These can suck warm air out of the house. 
• Consider consulting an expert on residential energy management.  These professionals have extensive experience helping homeowners save money and protect the environment.

Saving energy in the winter can translate into year-round energy efficiency.  Weatherproofing a home and practicing energy-savvy habits can help homeowners save money not only in winter, but throughout the year.

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This year is no different. We are proud to share that this year the following organizations received sizable cash donations to support their cause.

• McLean County Resource Center - North Dakota 
• Ruth Meyers Hospitality House - North Dakota
• Sharing and Caring Hands - Minnesota 
• Harry Chapin Food Bank - Florida
• St. Matthew’s House - Florida
• American Business Club BSO – Illinois
• Northern Illinois Food Bank – Illinois

We are so happy to be able to help make a difference in so many lives. A few of the organizations have shared their thanks with us and we would like to share them with you.

Harry Chapin Food Bank Thank You

“On behalf of Harry Chapin Food Bank’s Board of Directors, staff, volunteers, and especially our neighbors in need, thank you for your extremely generous donation, received on December 8, 2009 . Your donation will be utilized to provide food to those in need this holiday season. Due to our ability to multiply every donated dollar by six dollars, your donation has a food value of $12,000.00 and will provide the community with 7,491 pounds of food.” – Al Brislain Executive Director

Ruth Meiers Thank You

“Thanks so much for taking time out of your busy day to deliver your generous donation to Ruth Meiers Hospitality House. It was a pleasure to meet you & I’ll be sure to tell Dean “Hi” when I see him for Christmas. Happy Holidays!” – Kelly Director of Development

We hope everyone had a safe a Merry Christmas and a Happy New Year! Let’s make 2010 a great year…a green year!!!

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Safe toys are also “Green” toys. The safer they are for your children, the safer they are for our environment. Go Green this Season by buying safe toys and recycling old toys. Remember, if you have old toys that are no longer used, donate them if they are still safe, clean and good condition. Cut down on the landfill be recycling old toys. There are many needy kids in the U.S. and around the world who would be overjoyed to receive one.

Here are a few things to look for when considering a safe “Green” toy for your child:

• Make sure they say “non-toxic”
• Make sure only “lead-free” paint is used
• Buy only “washable” toys
• Toys made of fabric should be labeled flame-resistant or flame-retardant
• Check the age restrictions to make sure it is appropriate for the child you are buying for (http://www.cpsc.gov/)

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IMPACT FOR BUSINESSES – A business that carries back a NOL to a prior profitable year can obtain a quick refund from the IRS for that prior year. This will provide additional cash that the business can use to pay expenses, maintain operations, and make new investments.

This is a MAJOR door opener for businesses that will show a NOL for 2009 to free up additional cash to re-invest in their facilities, etc. Obviously, a bigger NOL for 2009 carried back five years will result in additional cash refunded back to the customer from the IRS against previous taxes paid, etc.

EXAMPLE:

Acme Company         Taxable Income       NOL Schedule

2004 Profit                   $50 Million *                50% of the taxable income ($25 MM)

2005 Profit                   $50 Million                   $50 Million

2006 Profit                   $50 Million                   $25 Million

2007 Profit                   $50 Million

2008 Profit                   $50 Million

2009 NET LOSS         -$100 Million

• * The ACME Company can carry back the 2009 NET LOSS (Dollar for Dollar) back five years….with the 5th year being limited to a 50% limitation on the available taxable income.
• In the above example….Acme can carry back up to (5) years with the 5th year limited to 50% of the taxable income. So they can deduct $25 Million against the 2004 taxable income……fully offset the 2005 taxable income of $50 Million….and deduct an additional $25 Million against the 2006 taxable income reducing the NOL to zero…but also getting back CASH with the additional deductions against previously paid taxes on taxable income.

BOTTOM LINE….If the Business will show a NET LOSS for 2009, now is the time to purchase the V-Blox system…..add to the loss, get back more money in refunds, and have a system in place that will add to the bottom line from now into the future!

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Because of this Green Building regulations have been put in place to achieve these Green Standards. TEC/V-Blox has instituted a “Certified Green Program” which recognizes your facility as taking steps to “Go Green” and save energy. Other Green Certifications include the LEED, the ASHRAE Standard 189 and the ICC-700. These certifications can be very difficult and expensive to achieve.

The benefits of the TEC/V-Blox “Certified Green Program” are saving our environment and as a business owner you will benefit from reduced energy consumption, reduced maintenance and downtime expenses, increased equipment life, and ultimately, you save money.  It’s a WIN-WIN situation as there are a multitude of benefits including regional recognition for your facility. 

Go Green Today with TEC/V-BLOX and join the thousands of other businesses that have already been certified and are enjoying the benefits………Ask an Energy Specialist how you can qualify!

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This year let’s give thanks to the one thing that has given us so much and keeps on giving, our environment. We get everything from the environment; food, water, air, and materials to live. Without it, we would not exist. So this Thanksgiving I want to take it one step further and come up with some ways I could show the environment how thankful I am. So here is a short list of ways to give back to the environment and help protect it for the future. I’ll be giving thanks, will you?

10 Ways to Give Thanks to the Environment by Going Green:

1. Help a little just by picking up any trash on the ground while walking by

2. Car pool to holidays parties and get-togethers

3. Use leftovers in soups or sandwiches instead of throwing them out

4. Be sure to recycle bottles, glass, and aluminum

5. Use cloth napkins instead of paper napkins to cut down on trash

6. Use candlelight and fewer electrical lights when possible to reduce energy costs

7. Do not over fill your refrigerator as it will use more energy to keep it the right temperature, instead put drink and other items in a cooler to make room for larger items in the refrigerator

8. Use Green cleaning products instead of harsh chemicals that are bad for the environment

9. Be cautious of water usage when preparing food and washing dishes; turn water off when not using or fill the sink with soapy water and reuse when washing dishes

10. Continue to do 1 – 9 all year long

Just a few simple changes can make a world of difference. Do your part to protect the environment.

Have a Happy Thanksgiving and Stay Green!

Total Energy Conepts

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The most important thing is to be prepared because when lightning strikes a transient voltage surge is produced, which can severely damage any equipment. Utilizing a surge protection system you protect your electrical equipment from lightning damage which decreases maintenance costs and downtime.

Surges, sags, and spikes (Momentary Voltage Impulses) are invisible problems because the damage they inflict may not destroy equipment immediately. These short duration impulses are common to all electrical systems and silently degrade solid state components and all electrical equipment, which leads to premature device failure.

A surge protection system is applied at every circuit breaker panel and places where two or more pieces of electrical equipment are getting power so all of your electrical equipment will be protected from any electrical disturbances. This application also protects all your electrical equipment from all transient voltage activity no matter where it originates.

With a surge protection system you can be confident that your electrical equipment will be safe from harm. In addition you receive a number of other benefits including less equipment downtime, fewer maintenance costs and you will be helping the environment “Go Green”. When equipment is damaged and not performing optimally you use more energy, with surge protection you reduce energy usage. You also cut done equipment waste because you’re not replacing your equipment as often and contributing to land fills.

Help the environment while surge protection increases your bottom line. Contact Total Energy Concepts for a free energy assessment.

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