Michigan buildings going green with great returns

We’re doing a lot in the State of Michigan these days to bring manufacturers of wind turbines, solar panels, etc. to our state, as well as helping to expand the purview of the existing manufacturers who are doing such a good job here so we can do more to save natural resources with renewable energy.

 – Reducing your utility consumption –

One of the facts that not very many people are aware of is that the huge stock of existing buildings uses 70% of the electrical energy and almost 40% of the natural resources in North America. This is far more than the transportation industry.

There are many ways to reduce the amount of electrical energy, natural gas and water in both new and existing buildings. The U.S. Green Building Council, an association of architects, engineers, building owners, managers and others, as well as many government agencies, has developed a reference system called LEED® (Leadership in Energy and Environmental Design). These guidelines are fast becoming the de facto standard for green, sustainable construction and a reason why existing building owners are keeping up – by making their buildings more marketable.

In this system, points are awarded for measures that reduce the consumption of natural resources and energy, as well as for using local materials, to mention only a few. Depending on the number of points achieved, different levels of certification are granted. Many municipalities and states like Michigan have adopted this system to save energy, reduce waste and increase productivity. The obvious reward for following LEED standards is a reduction in energy consumption, which turns into a return on investment; but that’s just a part of it. An extension for a tax deduction for energy efficient commercial buildings has been extended for five years to properties placed in service after December 31, 2008 and before January 1, 2014.

Kurt Siebenaller, one of the most respected CPA tax managers at the Michigan based UHY Advisors has this to say: “The deduction is available for interior lighting systems, heating, cooling ventilation, hot water systems and the buildings envelope, that are certified as part of a plan to reduce energy costs. The amount of the deduction will depend on the level of energy savings achieved.” In order to qualify for the deduction, the building must meet the ASHRAE Standard 90.1-2001. Without this deduction, the cost of some of these systems would have to be written off over periods of up to 39 years.

Jim Newman, Owner and Managing Partner of Newman Consulting Group, LLC, an EPA Energy Star and Rebuild Michigan Partner, comments that LEED has raised the consciousness of building owners to how much energy and water costs really are. He says: “The tax benefits are a great incentive, but to obtain these benefits, you must achieve reduction of consumption, and to reduce that consumption, you must operate efficiently. An example of this is that an older heating and air conditioning system operated well can outperform a newer system operated inefficiently.”

John Carlos, Director of Business Affairs for Energy Solutions Engineering Group says: “Lighting retrofits will bring you savings, but treating the distribution within has been forgotten. More than 40% of the electrical energy used in commercial  and industrial buildings is attributable to motors. By increasing the efficiency of these motors, thereby making them operate cooler, last longer and use less energy, have shown payback time to be as short at 24 to 36 months. Reductions of consumptions have shown to range from 8% to a whopping 21%, not to mention the LEED points obtained, the capital opportunities saved and the tax

There are many companies in Michigan offering systems that accomplish these measures as well as others that perform energy audits and LEED certifications on existing buildings to help reduce consumption of natural resources.