The business case for green building upgrades is solid. And air cleaning systems from Dynamic Air Quality Solutions produce tangible and easily quantifiable savings. The Dynamic ROI calculator identifies energy cost savings and reduced maintenance costs which can simplify your projects' payback analysis. But there may be other less tangible drivers that will greatly enhance ROIs, depending on the perspective of the stakeholder you are addressing.

There is conclusive evidence that among green buildings, increased energy efficiency is fully capitalized into rents and asset values.

There are other ROI influencers to Asset Value:

• Risk Mitigation - Energy is the largest percent of building operating costs (and the most controllable). Many cities have premiums for peak demand periods.

• Recruitment/Retention - Getting and keeping good people is increasingly important. Good talent can always find another home. And energy/green upgrades are tangible signs of employer commitment.

• Marketing & PR - Owners play up the value of being one of 50,000 LEED registered buildings, and/or 20,000 Energy Star buildings.

• Productivity & Health - People costs are 100 times greater than energy costs. There is evidence that better IAQ and lighting provides a 3-5% gain in productivity.

• Sustainability - Both internal and external stakeholders care about sustainability. 70% of stock value is "reputational capital." The reporting of sustainable practices is global and increasingly required by governments, investors, and customers. And corporate sustainability officers are actively looking for ways to meet their company's goals and objectives.   

Dynamic provides an excellent return on investment - based solely on energy and maintenance, as shown below.

And life cycle cost savings can be much greater where ventilation air can be reduced, as shown here.

ESCOs

Many ESCOs look at another metric --- DVA, or Dollar Value Added. DVA is a form of Net Present Value and shows savings over the lifetime of the equipment. Expressed in this manner, Dynamic V8 Air Cleaning Systems at the Time and Glass Museum (above), return an impressive $130,990...even without factoring in the additional savings that could be obtained from reduced ventilation air.

Initial cost is $15,010

Annual savings of $7300   

20 years expected equipment life x $7300 = $146,000    

Total Savings less first cost = $130,990

Enhanced ROIs targeted to the perspective of your stakeholder, can take your project from a "no-brainer" to a "slam-dunk". For more information about the Dynamic ROI calculator, contact your Dynamic rep or give us a call.

* Source: http://www.stuartkaplow.com/library3.cfm?article_id=191

** P. Eichholtz,N. Kok, J. M.Quigley, Sustainability and the Dynamics of Green Building, Review of Economics and Statistics, 2011.

 

Owners may still qualify for tax deductions for upgrades between 12.31.05 an 12.31.14

The Energy Efficient Commercial Building Tax Deduction, IRS 179D, also called EPACT, was designed to reward owners of commercial buildings who comply with higher energy efficiency standards. To make the tax incentive process easier and eliminate burdensome amended tax returns, the IRS has issued Revenue Procedure 2011-14. With this process, a commercial property owner can use IRS Form 3115 to calculate the missed incentive and report it on the next filed tax return. This process is particularly convenient for properties owned by multiple investors because individual investors do not have to amend their personal tax returns.

Section 179D allows up to $1.80 per square foot in deductions to those who have upgraded their building's lighting, HVAC, or building envelope. You can take the Section 179D deduction if you are:

• Owners of energy efficient commercial or multifamily properties built or retrofitted since 12/31/2005.
   
• New commercial and municipal buildings, retrofitted buildings, and LEED buildings of more than 20,000 square feet.
   
• Architects, engineers, ESCOs, and designers of energy efficient municipal building projects. (LEED certified buildings easily qualify.)

The 179D deduction provides a one-time accelerated depreciation for commercial, multifamily, and public agency-owned facilities. To qualify for the Section 179D tax deduction, the IRS requires an independent, third party energy tax study. Architects and construction companies that have designed energy efficient buildings for public agencies are also eligible.