Find Resources to Adopt Green Technologies for Your Business
The federal government can be a strong partner for a small business owner seeking to green a business. Many of the incentives are available through the tax system, but other federal agencies, including the Environmental Protection Agency and the Department of Energy are also potential sources of assistance.
Resources to help the small business owner adopt green technologies are available from the federal government, from state and local governments, and from private resources. Not surprisingly, informational resources are far more prevalent than financial resources, but some financial resources do exist. The problem for most small businesses is that many of those resources are targeted for the developer of green technologies rather than the end user.
Nevertheless, the availability of the resources is expected to grow, as the U.S. moves its energy policy in the direction of renewables and other related technologies. The optimism that small business owners feel is tempered somewhat, of course, by economic conditions. Whether funds will be available to encourage these technologies, and to what extent, remains to be seen.
The resources available through the federal government for going green are mainly available through the Environmental Protection Agency and the Small Business Administration. Some resources are also available through the Department of Energy.
But, as you might expect, the government also uses the tax code to encourage businesses and other taxpayers to adopt green technologies. Some of these are targeted at small business, others are available to anyone who pays taxes and is eligible. For those who have a home business or office, any credit available for residential purposes can also provide business benefits.
Government Resources Available Under the Federal Tax Laws
The Energy Policy Act of 2005 created several tax incentives for those involved in green technologies. The Emergency Economic Stabilization Act of 2008 and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the expiration date for many of those incentives, which had been set to expire at the end of 2008.
The tax incentives are of limited application to small businesses, consisting mostly of credits or deductions for energy developers rather than for energy consumers, although some could apply to small business owners.
Tax credits are dollar-for-dollar reductions in tax liability, while tax deductions are reductions in the amount of taxable income. Thus, the general rule that tax credits are more desirable than tax deductions applies.
Energy-efficient buildings deduction. A commercial building tax deduction provides a deduction of up to $1.80 per square foot for owners and designers of new and used commercial buildings that achieve at least a 50 percent energy savings in heating and cooling compared to a recognized standard (ASHRAE Standard 90.1-2001). A partial deduction of $.60 per square foot is available for energy-efficient measures taken on any of three of a building's systems: the envelope, lighting, and heating and cooling. The deduction applies to buildings modified or placed into service from January 1, 2006, and December 31, 2013.
Energy-efficient homes credit. A $2,000 tax credit exists for home builders who build energy efficient homes that achieve 50 percent energy savings for heating and cooling compared to a recognized standard (the 2004 International Energy Conservation Code). At least one-fifth of the energy savings must come from what are referred to as the building envelope improvements. For those builders who cannot meet the 50 percent threshold, a $1,000 tax credit is available for new homes that achieve a 30 percent energy savings. The credit applies to homes built before January 1, 2012.
Energy improvements credit. A 30 percent tax credit exists for consumers who make residential solar electric expenditures through December 31, 2016, with no cap. The credit also exists for wind expenditures and geothermal heat pump expenditures.
Energy-efficient appliances credit. A manufacturer's tax credit is available to those that manufacture energy efficient refrigerators, washing machines, and dishwashers that meet the EPA's ENERGY STAR requirements.
Renewable energy credit. Production tax credits exist for producers of renewable energy. Those who produce refined coal can use the credit through 2011.
Domestic fuel security write-off. Fifty percent of the cost of facilities that produce ethanol can be written off immediately if the facilities are placed in service before January 1, 2013.
Energy investment credit. A 30 percent investment tax credit is available for solar energy property, small wind energy property, and fuel cell property through January 1, 2017. An investment tax credit for microturbines and combined heat and power systems (such as geothermal heat pumps) is available through December 31, 2016.
Biodiesel production credit. A $1.00 per gallon production tax credit exists for small biodiesel producers through December 31, 2011.
Plug-in vehicle credit. A tax credit of between $2,500 and $7,500 may exist for those who buy plug-in electric vehicles.
Real estate bonds. Real estate developers can issue green building and sustainable project bonds through October 1, 2012.
EPA Resources for Small Business
Probably the best place to start to look for small business resources through the Environmental Protection Agency is the Small Business Gateway.
The Gateway includes general environmental information, environmental
laws and regulations, suggestions for finding government funding, and
access to environmental experts, if you're so inclined.
The Gateway, however, provides so much information that sorting
through it can be daunting. For example, the laws and regulations
section includes link after link to various laws and regulations, but it
lacks summaries or other more cogent explanations of what you need to
know. Few small business owners will have the time or the inclination to
read through countless laws and regulations in their raw form to
extract the information they might need.
So let's see if we can save you some time by culling through what
they provide so that we can point you to those resources in the Gateway
that might be the most useful.
The ENERGY STAR Program
One potentially useful resource is the EPA's ENERGY STAR program for small businesses. It provides information and technical support for reducing energy waste and costs.
For free technical support, more information, a free hard copy of
"Putting Energy into Profits," or to join the ENERGY STAR program, see
the EPA's online sign-up page.
The ENERGY STAR program has a component that recognizes small
businesses that have shown what the EPA calls "great examples of
financial and environmental stewardship." Here's a list of recent winners, including a discussion of what they did to earn their ENERGY STAR:
- Design commercial buildings to be energy efficient
- Measure and track energy use
- Develop a plan for energy improvements
- Make energy efficiency upgrades
Because ENERGY STAR focuses on improving the energy efficiency of
buildings, it tends, understandably, to be geared more to larger rather
than smaller businesses. The EPA, however, to its credit, has programs
and resources designed specifically for small businesses. Even if you
own a home-based small business, you can still, using the list above,
measure and track energy use, develop a plan for energy improvements,
and make energy efficiency upgrades.
EPA Laws and Regulations
As for the actual laws and regulations, the EPA does have a couple of
areas buried within its website that might useful for the small
business owner who is disinclined to read through all the laws and
regulations. The starting point is the EPA's online summary
of the laws and regulations that they administer, and how to get access
relevant information. On that page, you'll find links that might
be of particular use: Regulatory Information by Environmental Topic and Regulatory Information by Business Sector. If you have environmental concerns, you should be able to find out more
information from one of those sources.
Compliance incentives. The EPA has in place a policy to
encourage small businesses to discover and correct environmental
problems. If a small business owner voluntarily discovers a violation of
environmental law and promptly reports it, the EPA will eliminate or
significantly reduce penalties. For more information, see the EPA's
discussion of small business compliance and enforcement, where you can obtain a free copy of the policy as well as additional compliance information.
Contact the Small Business Ombudsman for guidance. One good contact to remember is the EPA's Small Business Ombudsman.
It's one thing to know an environmental law or regulation; it might be
quite another to apply it in the real world. Should you ever have any
questions about whether an environmental law or regulation applies to
you, the Ombudsman is one good resource to keep in mind (of course, your
lawyer would be another).
SBA DOE and Federal Energy Resources
The Small Business Administration (SBA) also provides energy
efficiency assistance for small businesses. The SBA, for example, has
its own ENERGY STAR program which provides ENERGY STAR FAQs and other resources for small business owners interested in green technologies.
Through the SBA's ENERGY STAR program, small business owners can get
free technical support and a free copy of "Putting Energy into Profits."
The guide can help you identify building equipment and systems that can
be updated and maintained to save energy. To join the ENERGY STAR
program, see the online application at the SBA's website.
The SBA, together with 21 other federal agencies, operates a website that provides access to government resources. At Business.gov, you'll find guides and other information on becoming more energy efficient.
The SBA also provides several loan programs for small businesses that are interested in making their facilities more energy efficient.
Department of Energy Resources
The Department of Energy's role in green technologies is to support
basic research into climate change and environmental degradation. It
doesn't offer a great deal for a small business owner, unless the small
business owner is involved in alternative technologies research and
If you are involved in such research or want to become involved, the
best place to start is by contacting an office within the Department of
Energy called the Office of Energy Efficiency and Renewable Energy (EERE).
EERE's goal is to enhance energy efficiency and to bring clean,
reliable, and affordable energy technologies to the marketplace. One of
the ways it does so is by partnering with private companies that are
involved in the latest green technologies.
Other than the energy development public-private partnerships, the
Department of Energy's principal connection with small businesses is its
co-sponsorship of the ENERGY STAR program, a joint effort begun in 1992
between the Department of Energy and the EPA to identify
energy-efficient products and to encourage businesses and consumers to
Grants and Other Federal Assistance
As for finding government grants and similar assistance, much of the information in the Small Business Gateway.
applies to relatively few small businesses. For example, grants and
other federal assistance are available, but generally only to high-tech
businesses that are developing cutting-edge green technologies. Some
financing may be available, but those tend to be the programs already
available through the Small Business Administration and are not
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