Efficient HVAC Systems May Qualify for Tax Breaks

HVAC, construction, energy efficiency, operating costs, green design   June 19, 2008

I’m Ed Sullivan, editor of Building Operating Management magazine. Today’s topic is potential tax benefits for very efficient HVAC systems.

The Energy Policy Act of 2005 – better known as EPAct – provides tax deductions for the installation of HVAC systems with energy costs that are at least 16.7 percent than an HVAC system designed to meet the 2001 edition of ASHRAE 90.1. The deductions apply both to new construction and to renovations. Although HVAC component upgrades typically don’t qualify, a comprehensive system installation is a good candidate. So are geothermal and thermal storage systems.

Getting the deduction isn’t easy. EPAct requires that the performance of the system be substantiated by energy modeling. And the modeling required is different than the modeling required by LEED. But rebates may be available to cover at least some of the cost of modeling, though the rebates must be obtained before the modeling is conducted.

The tax benefits are currently due to expire at the end of 2008. But there are proposals in Congress to extend the tax breaks. For green buildings and other buildings where significant HVAC work is planned, the tax breaks are worth looking into.


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