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New Incentives Could Cover the Cost of Your Lighting Project


When the CARES act was passed on March 27th of this year, it opened up the possibility for lighting install upgrades to be 100% written off if claimed during the install year, meaning that the federal government would be subsidizing any improvement by the amount of the companies federal tax rate.

  • QIP (Qualified Improvement Property) has been fixed by the CARES Act to now allow customers to write off 100% of an improvement like lighting (100% bonus depreciation). This is something that can be done even if the customer is leasing their building.
  • Under the CARES Act Section 2203: If a business is expecting a loss in 2020 they can carry losses back 5 years and apply to years where they were profitable.  If a customer is projecting a loss in 2020 this may be another way to get a 100% tax write-off on improvement projects like lighting.
  • You may be allowed to take a 1 time tax deduction for lighting of $0.60 per sq. ft. based upon Section 179D/EPAct based upon lighting energy reductions.

Here is a common lighting project example:

  • Imagine a lighting project for 50 high bay fixtures at $250/fixture for $12,500 total
  • The Duke rebate is $250/high bay fixture right now up to 75% of cost, so the cost would be reduced by $187.50/fixture for $9,375 leaving $3125
  • CBT contracts the installation labor at $9,000
    • Bringing the total to $12,125 for the project
  • At a 21% tax rate, you would be receiving $2,546 back in taxes utilizing the QIP 100% Bonus Depreciation
  • Under EPAct you may qualify for the one-time tax credit of $0.60 per sq. ft. Our example is for a 20,000 sq. ft. building so $12,000 is credited.
  • You could have over 100% of the project paid for (before considering energy and maintenance savings)!

CBT will help guide you through the process of claiming rebates and incentives, but consultation with a tax professional is recommended when taking advantage of incentives available through the CARES Act or EPAct.


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