I spend a good deal of time discussing federal green building projects, so it only seems natural that I pass on information regarding what could be a very beneficial program in that arena.

Chris DeVolder at 360 Architecture (the designers of the JE Dunn Headquarters) recently informed me about a tax incentive program stemming from the Energy Improvement and Extension Act of 2008. A report prepared by RSM McGladrey provides a succinct summary (.pdf) of the program:

“If your company owns or leases commercial buildings and you have constructed or retrofitted the property to be more energy efficient, you may be eligible for an accelerated deduction for part or all of the costs associated with the property. Incentives are available for:

  • Interior lighting systems
  • Heating, ventilating and air conditioning (HVAC) and hot water systems
  • Building envelope
  • Interior lighting systems
  • Heating and cooling service San Diego CA (HVAC) and hot water systems
  • Building envelope”

 These incentives allow for the potential immediate expensing of costs that would otherwise be capitalized and depreciated over 39 years.  For contractors, architects and engineers involved in federal green building projects, here is the most important part:

“In the case of energy efficient commercial building property installed on or in a property owned by a Federal, State or local government entity, an allocation of the deduction can be made to the person primarily responsible for designing the property in lieu of the owner of such property. This designer could be an architect, engineer, contractor, environmental consultant or an energy services provider who created the technical specifications for making the building energy efficient.”

You should consult with an attorney or tax consultant to ensure that you comply with all requirements. But the tax incentive provides a tremendous opportunity to capitalize on green building components that are incorporated into federal green building projects.

Related Links:

Improving Cash Flow With the Energy Efficiency Deduction (RSM McGladrey)(.pdf)