Several weeks ago, I conducted a short survey of lighting practitioners to see how they are using the Commercial Buildings Deduction. I got a very small response on the new construction side of the industry and a high response on the retrofit side. As the former lacked a statistically valid sample on which to make any conclusions, my lighting industry survey became a retrofit market survey. In my second post for today, I present the results in detail. In this post, I would like to share a few thoughts.
Although there appears to be good recognition of the CBD across the lighting market, the CBD appears to have a stronger penetration in the retrofit market than new construction/ renovation, even though the bilevel switching requirement is much less expensive in a new construction situation, and using the Interim Lighting Rule, specifiers can achieve a deduction for simply complying with ASHRAE 90.1-2004/2007.
The hassle factor and complexity of the requirements are significant, but the overwhelming barrier is lack of client interest. Either the client is not aware of the benefit or it is not compelling enough.
This may be strengthened by a perception that government buildings do not qualify or have no interest (no direct benefit). Further, the specifier may expect the owner to bring it to the table, may not build in sufficient fees to cover their end of the paperwork, and often find it difficult to calculate the benefit to the client because they don’t know the client’s tax rate and therefore can’t clearly articulate a specific direct benefit to the client.
On the retrofit side, things are more positive: The average respondent qualified for and obtained the CBD on about 44% of projects in 2008. One final item of interest to product manufacturers is that nearly nine out of 10 respondents (86%) do not cite “cannot find options to produce the desired energy savings” as a significant barrier, suggesting that the lighting community regards manufacturers as providing suitable solutions.
Regarding policy and as suggested by this research, the following suggestions might prove helpful to strengthen this policy:
* Consolidate all regulations into a single IRS document that is clearly worded and includes resources to answer potential questions from the market.
* Formally recognize the Interim Lighting Rule as the Special Lighting Rule, as it is no longer Interim.
* Remove the bilevel switching requirement from the Interim Lighting Rule and require the automatic shutoff requirements of ASHRAE 90.1-1999, which would be more suitable for a retrofit project.
* Clarify the new regulations for the Permanent Rule. Does lighting have to produce 16-2/3% savings or 20%? Nobody seems to know.
* And most important: Make the tax deduction a tax credit. That’ll get the attention of the private sector.
You must be logged in to post a comment.