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Knowing the Difference between Tax Grant and Tax Credit

With all this talk about financial incentives for renewable energy, do you know the the difference between federal tax grants and tax credits?

Here are the similarities between the two:

  • Both apply to Commercial, Industrial, and Agricultural sectors
  • Both can be applied to eligible systems of solar, fuel cells, small wind, geothermal, microturbines and CHP

Tax Grants are grants provided by the government and given to your business in the form of a check as a way to incentivize production of renewable energy. Tax Credits are also incentives given to your business in the form of credit towards paying off your yearly taxes. Credits can roll over to the following year if you don’t use them immediately. Credits are good for 5 years before they expire.

Now that you understand the difference between the two, understand that tax grants are going to expire by the end of this year (12/31/11)! So if you want to take advantage of these tax grants you will need to start the project by the end of this year! So act now!

For more information of tax grants and tax credits visit: Dept of State Incentives for Renewables and Efficiency (DSIRE)

Filed Under: Blog

Why Solar Will Not Become Obsolete

Working in the solar PV industry, you will hear a lot of concerns of solar technology becoming obsolete. It’s understandable because we live in a world where technology of computers and cell phones are changing every few months that once you purchase the new “it” product, there’s already a line waiting for the next new product.

However, what most people don’t understand is that solar technology has not changed much in the past 40 years. I believe Ed Begley Jr. (the green guru) explains it best in his book, Ed Begley, Jr.’s Guide to Sustainable Living.

He explains that solar technology has made very little changes since the space program in the 1950s when the photovoltaic technology was first put to major use. In the 1970s, solar technology was put to use in earth-based systems and thought about in a price-to-performance standpoint.

If people have a concern with the technology going obsolete or systems becoming much smaller and driving prices dramatically down in the near future, Ed Begley brings up the crucial point that

“The actual panel is a relatively small part of the equation. Most of the cost and installation of solar is labor, cable, brackets, and fuses. There’s so much that is not about the panels that’s involved in the process, so whatever technological advances might or might not occur at this point are not worth waiting for.”

He even goes on further to say that the solar operating in the satellites from the 1960s is virtually identical to his own solar panels on his roof, which goes to show you that solar panels are durable and are going to be functional for a really long time. If you’re worried about prices falling in the near future, you should know that many existing state solar rebates and incentives decrease over time because they foresee the inevitable drop in cost. So prices for solar may be higher now, but rebates are also the most generous.

Though solar technology hasn’t changed dramatically in the past 40 years, it does not mean new products of the solar industry aren’t being made. Thin film solar, bifacial panels, solar tiles, even solar spray. Technological research is being done to improve efficiency and size; however this research is just that, still in research. It will probably take another 10 to 15 years to get these readily distributed into the mass market. Also, when these new technologies first hit the market, they are going to be incredibly expensive, which brings up Ed’s point: unless you’re willing to wait that long, it’s not worth waiting for.

Solar panels degrade very little over time, they are known to be functional for at least 20 years. And because solar technology does not change all that quickly, if new technologies do come in, it should be fairly easy to “upgrade” your system to fit your electrical needs.

If you are curious as to what technological research is being done on photovoltaics, here are some websites to look into:

www.treehugger.com, www.scientificamerican.com, www.grist.org

Filed Under: Blog

What are the Costs to LEED and Green Building?

In Davis Langdon’s 2007 study, they found that many people still continue to see sustainable design as a separate feature, which leads to the notion that green design is something that gets added to a project, which makes them think that there must be added costs.

Sustainable design shouldn’t be seen as an add-on to a building. Whether you are constructing a new building or renovating an existing one, sustainable design is just a combination of choices from a vast amount of building construction or operational options. Just as there are low-cost and high-cost non-green buildings, there are low-cost and high-cost green buildings.

When viewed like this, it’s no wonder why studies have found that there are no significant difference in cost between green buildings and conventional buildings.

This post will answer three questions on this topic: 1. What are the costs to building green? 2. What are the costs to LEED certification? 3. How much do you save on a green building?

What are the costs to building green?

The Davis Langdon’s 2007 study analyzed a total of 221 buildings. Eighty-three buildings were selected that were designed with a goal of meeting some level of the USGBC’s LEED certification. The other 138 projects were buildings of similar program types that did not have a goal of sustainable design. The cost per square foot was compared between all the projects.

Their findings were that the cost per square foot for buildings seeking LEED certification falls into the existing range of costs for buildings of similar program type.

A majority of the buildings studied were able to achieve LEED certification without any additional funding. Others that required additional funding were used for specific sustainable features, such as the installation of a photovoltaic system. With these specific sustainable features, initial costs may be high compared to conventional buildings, but it is more than compensated for over the lifetime of the building in financial returns such as savings in utility bills, increased property values, and increased employee productivity.

What are the costs to LEED certification?

There are initial registration and review fees involved in getting a building LEED certified (more information can be found at GBCI’s website). These are the fees currently posted on their site as of November 16, 2011.

For Existing Buildings:

Project Gross Floor Area in Sq Ft (excluding all parking areas) Expedited Review
Less than 50,000 50,000- 500,000 More than 500,000
Initial Certification Flat rate Per Sq Ft Flat rate
Registration
USGBC members $900 N/A
Non-members $1,200
Review
USGBC members $1,500 $0.03/sf $15,000 $10,000 surcharge
Non-members $2,000 $0.04/sf $20,000

For New Construction:

 

Project Gross Floor Area in Sq Ft
(excluding all parking areas)
Expedited Review
Less than 50,000 50,000- 500,000 More than 500,000
Registration
USGBC members $900 N/A
Non-members $1,200
Standard Review
Flat rate Per Sq Ft Flat rate
Design & Construction Review
USGBC members $2,250 $0.045/sf $22,500 $10,000 surcharge
Non-members $2,750 $0.055/sf $27,500

Becoming a member also comes with its own fees. More information about that can be found on USGBC’s website.

Getting your building LEED certified does not have to be a large expense if you don’t want it to be. LEED is great in that way because it lets you choose which credits to pursue. This way you can avoid the big-ticket options and stay within your budget. If you are trying to achieve a LEED certification for your building, consider LEED for Existing Buildings: Operations and Maintenance (LEED EB O&M).

Green-buildings.com summarizes a study done by Leonardo Academy where they found that “The average cost per square foot to achieve LEED EB O&M was $1.61.” Among those surveyed,  the majority considered many of the LEED Prerequisites and LEED Credits to be “Low or No Cost”.

For example, some of the prerequisites for EB O&M involve putting up a sign showing the smoking policy of the building, or putting together a policy with your staff on sustainable practices of your building. Many of which can be done without much costs.

How much do you save on a green building?

With green buildings, there may be some high initial costs to such features as: photovoltaic installations, lighting retrofits, HVAC retrofits, or purchases of energy efficient office equipment. These features also come with short paybacks, savings on utility bills, lower operational and maintenance costs, and enhanced occupant health and productivity; all of which are quick returns on your investment.

Local rebates and incentives also help cut those high initial costs if your building qualifies. This means even more savings.

In Capital E’s 2003 report, it found that “minimal increases in upfront costs of about 2% to support green design would, on average, result in life cycle savings of 20% of total construction costs”. In other words, paying a little more now, means tremendous savings over your building’s lifetime.

To read more about the above studies on the financials of green building click on the following:

Davis Langdon’s “The Cost of Green Revisited”

Capital E’s “The Costs and Financial Benefits of Green Buildings”

About Annie

Annie is a Sustainability Consultant at Vaha Sustainable Energy. She studied Anthropology and Environmental Studies at Univeristy of California – Los Angeles (UCLA) and is interested in sustainable building and architecture.

Filed Under: Blog

U.S. PV Installation Higher than Ever!

GTM Research shows that the third quarter of 2011 was the best ever for American solar power installers. Through the third quarter of 2011, the U.S. solar market installed more than 1 gigawatt (GW) of grid-connected photovoltaics (PV) on the year! Last year the annual total was 887 megawatts (MW). The rapid decline in panel prices have made a major impact on PV sales and installations.

Most of those American installs consisted of utility installations.  Utility installations in Arizona, California, and New Mexico made up the largest portion of the utility projects in the US. Overall the utility installations grew 325% over the second quarter of the year. Over 500 MW of utility PV is under construction in the US and anticipate completion in early 2012.

For more information on this report, please visit

http://www.treehugger.com/renewable-energy/solar-industrys-dead-not-hardly-us-or-china.html-energy/solar-industrys-dead-not-hardly-us-or-china.html

About Annie

Annie is a Sustainability Consultant at Vaha Sustainable Energy. She studied Anthropology and Environmental Studies at Univeristy of California – Los Angeles (UCLA) and is interested in sustainable building and architecture.

Filed Under: Blog

Vons Credit Union Becomes First LEED® Gold-Certified Private Building in El Monte, CA

The credit union continues to lead the way for sustainability with LEED Gold certification and the addition of a 144-panel solar carport.

July 17, 2012, (El Monte, CA) – Vons Credit Union (VCU) announced today that it has been awarded LEED Gold certification by the U.S. Green Building Council (USGBC). LEED (Leadership in Energy and Environmental Design) is the USGBC’s leading rating system for designing and constructing the world’s greenest, most energy efficient and high-performing buildings, and verifies environmental performance, occupant health and financial return. LEED was established for market leaders to design & construct buildings that protect and save precious resources while also making good economic sense.

read more: http://www.prweb.com/releases/2012/7/prweb9736245.htm

About Gaye

Gaye is the co-founder and Chief Operating Officer of Vaha Sustainable Energy. She has been involved with the “green” markets for over a decade, first in the food industry then in sustainable development. She co-founded Vaha with a mission to address the increasing energy costs and global air pollution problems by offering solutions that lower the operational costs and replace the dirty energy sources with the clean and sustainable ones.

Filed Under: Blog

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