Going Green to Beat the Economic Blues

By Andrew Demaria

A looming recession. Economic downturn. Credit crisis. All fearful catchphrases that are dominating the financial pages of newspapers and piling pressure on businesses to tighten purse strings.

But the news isn't necessarily all doom and gloom.

Companies can make the most of a raft of government tax incentives to green their operations and pad the bottom line.

Most of the buzz about the White House's economic stimulus package has focused on rebates for private taxpayers. However, several initiatives in the act appeal to businesses looking to purchase equipment or refit their property.

Companies that cash in on the incentives by purchasing energy efficient equipment and investing in greener infrastructure will not only save money through tax breaks, but also on future utility bills, according the Caroline Fluhrer, a consultant with Rocky Mountain Institute's Built Environment Team.

Under the stimulus package, businesses can write off 50 percent of new plant investment or new equipment purchased in 2008. Additionally, tax write-offs for new investments this year has doubled from $125,000 to $250,000. The limit for businesses eligible for relief has extended from those making $500,000 to $800,000. (Link to Stimulus package)

Those figures allow significant investments, but how companies spend that money is key in determining their performance in reducing energy consumption costs.

"It's important that businesses don't just take a piecemeal approach," says Fluhrer.

"We advise that companies first invest in equipment that reduces demand for energy, for example by purchasing Energy Star appliances like copiers and printers, and also improving lighting... by reducing glare, increasing reflective surfaces and adding sunlights."

That way companies "are able to get more bang for their buck," Fluhrer says. "If you are purchasing more efficient items first, it can reduce your capital expenditures elsewhere."

For instance, if a business' new equipment gives off less heat because it is more efficient than its old equipment, then air conditioning or cooling systems can be made smaller.

Fluher says that the ratio for new and capital investment will vary on a case-by-case basis. "But whatever the budget, whether it be $100,000, $200,000 or whatever, you have to take a certain percentage of that investment and spend it on efficiency in order to find the sweet spot that gets you the most value."

RMI's Built Environment Team is an international leader in the green building with expertise in energy efficiency, daylighting, and the LEED (Leadership in Energy and Environmental Design) rating system.

Budgets for projects have ranged from as little as $11 per square foot to $120 per square foot and beyond.

BET has contributed to the design of hundreds of successful projects throughout the world that span diverse climates and building type.

Media contact for Rocky Mountain Institute
media@rmi.org