Commercial Buildings Can Go Green and Save Big

The lights are always on at businesses that operate 24 hours a day, seven days a week.

The lights are always on at businesses that operate 24 hours a day, seven days a week. Indoor lights are used around the clock, and outdoor lights can be on upwards of 15 hours a day. Add in the fact that some travel plazas are spread over multiple acres, and the amount of power a location uses equates to substantial electric bills. To help cut costs and go green, many locations are turning to energy-efficient lighting. What’s even better is that federal tax incentives and rebates from municipalities are making lighting upgrades more affordable.

Michael Lawshe, president and chief executive officer of Paragon Solutions, said new construction that utilizes new lighting technologies can get a payback in three years, and retrofits to existing buildings can typically get a payback in five years. “It is a number that is easy to calculate. We just have to know more about the lighting they are using now,” he said.

The payback period also varies based on the financing options locations can obtain.

To determine appropriate local incentives, operators can check with their power company. “Approximately 80 percent of the utilities have some rebates that would apply to your store. It can be as much as 25 percent of the total cost of the technology,” said Joe McFadden, president of Boyd Energy Group, a national energy solutions firm.

Business owners can also take advantage of federal tax deductions for improving the energy efficiency of commercial buildings.

“There are straight tax deductions in the tax code for up to $1.80 per square foot,” Lawshe said. “The problem is that if you go to your CPA, he isn’t going to know what it is because it probably isn’t his area of expertise.”

Lawshe recommends that business owners read through the information on the Department of Energy’s (DOE) website. “There are step-by-step guidelines on the site,” he said.

The Energy Policy Act of 2005 first offered businesses tax deductions for the costs of improving the energy efficiency of commercial buildings. The Emergency Economic Stabilization Act of 2008 extended those provisions through Dec. 31, 2013.

The DOE’s website said the tax deduction is available for buildings that save at least 50 percent of the heating and cooling energy in a building that meets standards outlined by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE). “Partial deductions of up to $0.60 per square foot can be taken for measures affecting the building envelope, lighting, or heating and cooling systems. This act extends the deduction,” according to the site. DOE also provides a list of approved software that can help business owners calculate their tax savings.

McFadden told Stop Watch there are companies, such as Boyd Energy, that offer funding options that take into consideration tax incentives, rebates and financing, which allows the business owner to have a monthly energy savings that is more than the monthly cost of a lease for the technology. “It is a cash flow positive and at the end of the term 100 percent of the savings goes into the store owner’s pocket,” he said.

When locations are ready to upgrade their outdoor lighting, Lawshe suggests they research their lighting options in addition to their funding options. The technology is ever changing and some lighting is better for certain applications. “A lot of people are saying LED is the answer to everything. It is an answer, but it isn’t for everyone and it isn’t for everything,” he said. “Just be careful when you’re looking for your solutions because there isn’t one solution.”


This article originally ran in Stop Watch magazineStop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations and provides context on trends and news affecting the industry.

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