Guest Post by Leif Elgethun, VP
Site Based Energy
Leif Elgethun
Companies haven’t always looked at energy consumption as an opportunity to reduce operating costs and improve their bottom line. As long as the lights came on and equipment ran, utility bills would get paid. For most businesses today however, energy costs are a significant and increasing part of their overhead. Currently, the timing is right to reduce energy consumption while hedging against future energy price increases. The three primary reasons businesses should look at energy efficiency and renewable energy today are; proven technology, utility and government incentives, and available financing.
Technology has significantly improved in the last decade, which has opened up new ways to cost-effectively reduce energy consumption. In particular, LED lighting, solar photovoltaic, solar thermal and high efficiency heating and 
cooling equipment have made major strides while seeing plummeting costs. The result is that the technology is proven and at an attractive price point.
The availability of utility and government incentives can reduce the upfront cost of energy efficient and renewable energy solutions by over 50% in some areas. The primary incentives clients qualify for include Idaho Power rebates, federal tax credits, and USDA Rural Energy for America Program (REAP) for small businesses and farms in rural areas outside the Boise metro area.
Idaho Power rebates are available for energy efficient equipment and installations. They have programs for lighting, heating and cooling, building controls, windows, roofs, fans, and many other energy efficient equipment. Getting the incentives can be tricky, but Idaho Power’s rebates can be up to 75% on qualifying improvements. They even will pay for energy audits on larger facilities.
Currently there are federal tax credits for eligible renewable energy equipment that includes solar photovoltaic, solar thermal, geo-exchange heat pumps, and a few other items. The tax credit is 30% for solar equipment and 10% for geo-exchange heat pumps. Because it’s a tax credit versus a tax deduction, you should be able to write off the full 30%. The equipment is then depreciated on the 5 year Modified Accelerated Cost Recovery System (MACRS) schedule, which also can be helpful depending on your tax situation.
The final incentive is the USDA REAP grant that pays 25% of the project cost for eligible companies and projects. The grant is available to small businesses and farms in rural Idaho and Oregon, which is defined as communities under 50,000 people. In Idaho and Eastern Oregon, this covers most of the state except the Boise metro area. The grant is available for all commercially available energy efficient and renewable energy equipment. The grant is a competitive grant and we recommend having a professional grant writer help with the process to ensure success.
Finally, the availability of lease financing specifically for energy efficient equipment has increased dramatically with both energy efficient lease companies and banks having an interest in energy efficient and renewable energy projects. Recent developments through leasing companies will allow for collateralization only on the installed equipment, with 100% financing of project cost. If the lease term is longer than the payback on the equipment, the project can actually be cash flow positive from day one, require zero out of pocket expense, and stay off the debt portion of the balance sheet.
It has never made better business sense to look at energy efficiency and renewable energy projects to cost effectively control your energy expenses. With great technology, substantial financial support, and the attractive financing options, it’s also never been easier to take action.
Leif Elgethun is a Partner at Site Based Energy (SBE), a full service energy efficiency and renewable energy solutions firm with offices in Boise and Hailey. SBE provides a broad range of comprehensive energy solutions including design and implementation of energy savings projects, energy infrastructure, power generation and energy supply. SBE performs in-depth project analysis, designs energy solutions, installs designed systems, and maintains systems to ensure energy savings during the payback period.
