Consider Incentives for Existing Buildings, Too

Consider Incentives for Existing Buildings, Too
Further Tax Credits for “Green Buildings” and Senate File 2046

This past week the Business Record published an article by Bill Dikis regarding green buildings for healthy initiatives and tax credits for LEED Certified buildings. Different levels of LEED “benchmarking” would result in higher percentages of tax credits. It is important to note that while most people’s perceptions are that to become a LEED building, it has to be designed and built that way. However, there are also LEED benchmarks available for existing buildings that are updated or retro fitted to improve their use of “natural resources”.

Two well-known Des Moines examples are the new Blue Cross Blue Shield facility which received the highest level LEED benchmark for a new structure, and the rehab of our old library, now the World Food Prize building, which also achieved the highest rating of Platinum for an existing structure. Both buildings earned these ratings through many hours of engineering and design work through talented architects like Mr. Dikis, and many hours of filling out extensive forms and paperwork to receive the rating.

Certainly these buildings deserve some extra incentive to help justify the time, expense and efforts to attain this rating. A LEED building is designed and built in a manner which should result in decreased operating expense, with a reasonable payback over a “standard” building. However, the task of retrofitting a building and the actual application process has become a disincentive for many building owners to undertake the task.

The EPA also has a benchmarking system for existing buildings based on energy usage. The process is comprised of a building survey to determine which measurement factors the building will be compared against. For example, the type of building, the number of computers in use, the location, and size are a few of the details gathered on the survey. Then the past 12 months of energy use (gas, oil, electricity) are submitted with the survey. The building is then compared against other buildings in a similar climate, type, etc., and then a cost per square foot determines the ranking. Any building rated 75 or higher (meaning on a scale of 0-100, the building ranks in the 75^th percentile or better than similar buildings), qualifies for Energy Star designation. This is very similar to the Energy Star you see on appliances and electronics. Once that rating is achieved the building can be submitted to officially receive that designation from the EPA. The final step is to print off several forms and the report, and have them reviewed and certified by a Professional Engineer. These are then submitted to the EPA and in a few weeks the facility receives official approval and a plaque to post.

A much more simple process, but it still identifies a facility that is operating efficiently, also using less of our natural resources. While it does not necessarily mean it is a healthy building like a LEED building is designed to be, and does not take into account all the qualifiers that a LEED building must utilize, it does offer a more palatable process for most building owners to improve or maintain their building. While the benefits of an Energy Star building are less pollution, energy use, and the resultant cost savings, would a tax credit be appropriate for Energy Star rated buildings be warranted? More often than not, HVAC maintenance, controls and lighting can often have very short capital payback and long term energy savings. That alone might be enough justification. If Senate File 2046 rewards a LEED building, which also receives payback on operating costs, should an Energy Star rated building be included? Interestingly the Energy Star rating is only for a 1 year period, which means each year it is reevaluated to make sure it is still performing at 75% or higher against other similar buildings. That by necessity means the building must continue to be properly maintained and as new more efficient technology becomes the standard, the building must “Keep up with the Joneses” to retain their rating.

While minimizing energy use and the carbon footprint is the right thing to do for our environment and health, often the decision is an economic one. The fact that buildings use a very large percentage of our total energy and may be one of the easiest to “fix”, should we apply a little extra nudge in a tax incentive to help justify improvements and equipment maintenance?