1. Energy Tax Savers, Inc. EPAct Presentation Energy Tax Savers Jacob Goldman jacob.goldman@energytaxsavers.com Required Energy Techniques for Modeling building

2. 2 Energy Policy Act of 2005 (EPAct) Extended through 12/31/13 Benefits available from 1/1/06 thru 12/31/13 Incentivized areas: – Lighting – HVAC – Building envelope Available for New Construction and Existing Buildings Also available for: – Tenant owned lease-hold improvements – Primary Designers of Government Buildings jacob.goldman@energytaxsavers.com

3. 3 Whats it Worth? Potential Tax Savings for 300,000 sq. ft. Immediate Tax Deduction Whole Building$540,000 Individual System Approach Lighting$180,000 HVAC$180,000 Building Envelope$180,000 Assumptions: 300,000 sq.ft. of facilities, Qualifying Energy Efficient improvements for entire space With Government Buildings these benefits go to the Primary Designer jacob.goldman@energytaxsavers.com

4. 4 Commercial Building Immediate Deductions Stimulus Package emphasizes Energy Efficiency in Government Buildings Architects/Engineers/Lighting Designers – DOE goal to incentivize green design in government building sector Benefits passed through to the primary designer of: – Federal offices, military bases, court houses, post office, labs etc. – State offices, transportation facilities, state universities, court houses etc. – County, city, town, village etc offices, schools, town halls, police, fire, libraries et c. jacob.goldman@energytaxsavers.com

5. 5 Whats in it for Architects/Engineers/Lighting Designers ? Growth in this EPAct area for government building designers is exploding Successful Design Niches: – K-12 Public Schools – State Universities and Colleges – Military Bases – Parking Garages – Airports jacob.goldman@energytaxsavers.com

6. 6 How do you Qualify? Mechanics – Deductions based on improvements over ASHRAE 90.1 2001 – Energy efficient improvements must be depreciable assets Converts 39 year depreciation to current deduction – Available for installations completed between 1/1/06 & 12/31/13 Can begin in prior years – Deduction amounts: Lesser of total cost or: – $1.80/sq.ft. Whole Building – $0.60/sq.ft. Individual Systems a. Lighting b. HVAC c. Building Envelope ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) HVAC (Heating, Ventilation & Air Conditioning) jacob.goldman@energytaxsavers.com

7. 77 8 Ways to Capture Tax Deduction (1) Whole Building ($1.80/ft 2 ) – 50% Energy Cost Reduction below standard Permanent Rules partial deduction ($0.60/ft 2 ) (8) Interim Lighting Rules ($0.30/ft 2 -$0.60/ft 2 ) – 25% to 40% prescribed Light Power Density (LPD) reduction below standard Building Envelope LightingHVAC Alternative 1 (2) 16 2/3 % (3) 16 2/3 % (4) 16 2/3 % Alternative 2 (5) 10% (6) 20% (7) 20% jacob.goldman@energytaxsavers.com

8. Where are the Benefits Lighting, Lighting, Lighting Lighting Controls Specific Types of HVAC – Geothermal – Thermal Storage – Central Chiller plants with small buildings(<150,000sq.ft.) in Campus LEED Buildings 8 jacob.goldman@energytaxsavers.com

9. 9 Commercial Building Immediate Deduction Permanent Rules – 16 % overall cost improvement below standard generated by each system (Lighting, HVAC, Building Envelope) – Energy models confirm savings – Daylighting systems particularly well suited – HVAC may qualify with as little as a 25% improvement over standard jacob.goldman@energytaxsavers.com

10. 10 Understanding Energy Models IRS has approved thirteen types of modeling software – eQUEST, Trane Trace 700, Energy Plus, Carrier HAP, VisualDOE, EnergyGauge, DOE2.2, DOE2.1E & 2.1E-JJH, Owens Corning Commercial Energy Calculator, Green Building Studio, EnerSim, IES – other submissions are in process Important modern Energy management tool. Currently required for all HVAC and building envelope deductions and for whole building lighting alternative. In many jurisdictions, rebates are provided for all or substantial portions of modeling costs. jacob.goldman@energytaxsavers.com

11. 179D Modeling Technique Overall GuidanceNREL/TP-550-40467 May 2007 TechniqueASHRAE 90.1 2004 Appendix G Reference DataASHRAE 90.1 2001 VentilationASHRAE 62 1999 Load DataTitle 24 (In NREL document) Exceptions Ventilation RateASHRAE 62 1999 not Title 24 OccupancyTitle 24 not ASHRAE 62 1999 Lighting LoadASHRAE 90.1 2001 not Title 24 11 jacob.goldman@energytaxsavers.com

12. EPAct Modeling Technique HVAC Example 1. Model and size your actual building and HVAC system 2. Model a reference building designed to ASHRAE 90.1 2001 data using Title 24 loads and ASHRAE 90.1 2004 Appendix G methodology. 3. Copy the reference building and remove the reference HVAC equipment. Insert the actual equipment from step 1 into this reference building. Compare the cost of energy between step 3 and step 2. A 16.67% improvement gets tax savings. 12 See NREL/TP-550-40467, May 2007 jacob.goldman@energytaxsavers.com

13. 13 From ASHRAE 90.1 2004 Appendix G jacob.goldman@energytaxsavers.com

14. 14 Techniques for Achieving HVAC Tax Savings 1. More Efficient than Reference Equipment Put in Highly efficient equipment and add – VFDs – Economizers – Demand Ventilation – Energy Recovery Ventilation – Etc. 2. Different Equipment than Reference Equipment Chillers where Packaged Units are in the Reference Building Central Plant Geothermal 3. Take advantage of Time of Day Energy Pricing Thermal Storage jacob.goldman@energytaxsavers.com

15. What Tends to Qualify on the HVAC side? 1. Geothermal (Ground Source Heat Pumps) 2. Thermal Storage 3. High Efficiency PTAC units in Rental Apartments 4. Centralized HVAC in Rental Apartment Buildings 5. Energy Recovery Ventilation 6. Demand Control Ventilation 7. Chillers in buildings < 150,000 sq ft 8. Blow through heaters in no AC Industrial Spaces 9. VAV (variable air volume devices) in buildings <75,000 sq ft 10. Chilled Beam 11. Magnetic Bearing Chillers 12. Gas fired chillers combined with electric chillers to peak shave jacob.goldman@energytaxsavers.com

16. Electric Chillers in Baseline 16 From ASHRAE 90.1 2004 Appendix G jacob.goldman@energytaxsavers.com

17. 17 From NREL Technical Report NREL/TP-550-40467 May 2007 jacob.goldman@energytaxsavers.com

18. 18 From ASHRAE 62 1999 jacob.goldman@energytaxsavers.com Use NREL Technical Report NREL/TP-550-40467 May 2007

19. 19 Use ASHRAE 90.1 2001 Use ASHRAE 62 1999 jacob.goldman@energytaxsavers.com From NREL Technical Report NREL/TP-550-40467 May 2007

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21. Differences between LEED & 179D Section 179DLEED v2.2 Overall GuidanceNREL/TP-550-40467 May 2007ASHRAE 90.1 2004 Appendix G TechniqueASHRAE 90.1 2004 Appendix G Reference DataASHRAE 90.1 2001ASHRAE 90.1 2004 Appendix G VentilationASHRAE 62 1999ASHRAE 62.1 2004(?) Load DataTitle 24 (In NREL document)Actual Loads Exceptions Ventilation RateASHRAE 62 1999 not Title 24No Exceptions Occupancy/sq.ft.Title 24 not ASHRAE 62 1999No Exceptions Lighting LoadASHRAE 90.1 2001 not Title 24No Exceptions 21 jacob.goldman@energytaxsavers.com

22. Estimating 179D from a EA 1 Credit Worksheet 22

23. The Modelers role Analyze existing projects for EPAct potential – Communicate the potential to Management Most projects are on the margins (between 0&1 or 1&2 deductions) – Suggest design improvements to capture additional EPAct $s Modeling is now a profit center for government projects More & more rebates are based on modeled results Additional EPAct $s corresponds with added LEED pts. 23

24. 24 Energy Tax Savers Inc. http://www.energytaxsavers.com/ Energy Tax Savers 12 Split Rock Rd. Syosset, NY 11791 Phone: 516.364.2630 Fax: 516.364.2646 Email: jacob.goldman@energytaxsavers.com