Saving Money Through Energy Efficiency An Overview of Energy Policy Act and the Utility Company Incentive Programs Eric W. Sank, P.E., RCDD. Design Collaborative, Inc. October 25, 2012

2005 In an attempt to combat growing energy problems, Congress passes The Energy Policy Act, providing tax incentives and loan guarantees for energy production of various types.

3 Areas - Lighting - Building Envelope - HVAC Maximum Deduction - $.60/ft 2 ($1.80/ft 2 total for all 3) Renovated Area Up to Total Material Cost

2 Methods to Qualify 1. Building-wide Energy Model - largest deduction, more complicated to certify 2. Interim Lighting Method - simpler to calculate, better suited for lighting retrofits

Building-Wide Energy Model - ASHRAE/IESNA Standard Requires software modeling of building energy usage

Compliance - ASHRAE/IESNA Standard 90.1

Interim Lighting Method - Out with the old…

Requirements - Consumption & Building Type

EPACT Deduction - How do I qualify? 40% >25% PRO-RATED

EPACT Deduction - How do I qualify?

Lighting Controls - ASHRAE 90.1 (2001) - Bi-Level Switching

Additional Savings Methods - Rebates/incentives through local power company - Fixed rebates or custom incentive packages

Utility Co. Incentives Restaurant & Grocery Audit Program - Free audit of refrigeration system - Incentives for: Automatic door closers LED case lighting Motion sensor on case lighting Night covers

Utility Co. Incentives Commercial & Industrial Incentives - Custom program, tailored to individual customers - Retrofit only, new construction does not qualify - Must save at least 100,000 kwh/yr - Rebate of $.05 per kwh saved

Utility Co. Incentives Commercial & Industrial Rebates - Administered by 3 rd party (Energizing Indiana) for several utilities throughout the stateI&M, Duke, NIPSCO, & others - 3 Rebate areas: Lighting, HVAC, & Food Service Equip. Lighting - replace T12 or HID light fixtures - no LED rebates (yet) HVAC - min. efficiency of HVAC equipment, add VFDs to motors Food Service – Replace with energy star equipment -New construction qualifies for rebate Baseline is minimum design that meets building & energy codes

Additional Savings Methods

Utility Co. Incentives Emergency Demand Respond Rider - Customer agrees to reduce demand at critical times and receives monthly payment from I&M - Minimum 250 kva reduction - Benefit for customers with generator backup - $2.50/kw/month

Utility Co. Incentives HVAC Rooftop Tune-Up - Incentivesfor adding economizer, CO 2 sensors, multi-stage cooling

Certification & Documentation - Site Visit - Calculations - Fixtures - Saving

Example - 200x 200 Warehouse - Existing 400 watt Metal Halide 25 O.C watts/ea = 29,184 watts 26.1 footcandles,.73 watts/sq ft. 29, hrs/day = $31.05/day or $11,333.00/yr

Example - Replace 1 for 1 With 6-lamp T5HO Fluorescent Hi-Bays + Dual Level Switching + Instant On + Less Lumen Loss + Longer Lamp Life w/ea = 23,104 watts 34.0 footcandles,.58 watts/sq ft. 23, hrs/day = $22.67/day or $8,273.00/yr

Example - Replace 1 for 1 with (6) T5HO Fluorescent Hi-Bays + Switching + Instant On + Lumen Loss + Lamp Life w/ea = 23,104 w & 34.0 f.c. 23, hrs/day = $22.67/day or $8,273.00/yr $3,060/yr SAVINGS OF

SAVINGS - 24 hour operation savings$5,245/yr - Reducing the number of new fixtures to maintain current light levels leads hrs/day$9,500/yr

TAX SAVINGS/TOTAL COST Material costs (assume in-house labor)-$11520 Tax Savings Max. Allowable – 40,000 ft 2 × $.60$24,000 Actual Cost$11,520 Allowable Deduction$11,520 Typical Corporate Tax Rate 30% Tax Savings $3,456 I&M Rebate $51/fixture x 64 $3,264 Total Initial Savings+$6,720 TOTAL COST $4,800

1 FOR 1 14/day operation, payback = /day operation, payback =.9 yrs W/ EXISTING F.C. LEVELS (30% Fixture Qty 14/day operation, payback =.6 24/day operation, payback =.4 yrs PAYBACK

Saving Money Through Energy Efficiency An Overview of Energy Policy Act and the Utility Company Incentive Programs Thank you!