Strategy #3 - Invest in Cost-Effective Renewable Energy Systems
Like end-use efficiency, advances in renewable energy technologies and the rapidly increasing cost of petroleum fuels and electricity suggest revisiting the application of renewable energy systems. These include groundwater source heat pumps, solar hot water, solar electric or photovoltaic (PV), bio-diesel, and, in selected locations, small wind energy systems. Given that the capital investment in these systems is substantial, and that the performance of the solar and wind systems will vary considerably based on availability of sun and wind resources, PA recommends a feasibility study be done to determine the cost effectiveness for a specific hotel property.
With Federal and State tax incentives and financing options, on top of the current cost of energy, these systems can payback as quickly as 2-3 years. Exhibit 1 provides a summary of state and utility renewable energy incentives. The following Federal renewable energy incentives are available, but are due to expire at the end of 20082:
Clean Renewable Energy Bonds provide 0% interest rates whereby the borrower pays back the principal only.
Corporate Renewable Energy Tax Credit provides a 30% tax credit on qualifying solar hot water, PV, and solar lighting (fiber-optic light tubes)
Accelerated Depreciation provides for the depreciation of 50% in the first year, and the remaining 50% of the normal depreciation schedule
Renewable Energy Production Tax Credit provides for a tax credit of 1.5 cents per kilowatt hour for wind and biomass electric systems.
Strategy #3 - Invest in Cost-Effective Renewable Energy SystemsLike end-use efficiency, advances in renewable energy technologies and the rapidly increasing cost of petroleum fuels and electricity suggest revisiting the application of renewable energy systems. These include groundwater source heat pumps, solar hot water, solar electric or photovoltaic (PV), bio-diesel, and, in selected locations, small wind energy systems. Given that the capital investment in these systems is substantial, and that the performance of the solar and wind systems will vary considerably based on availability of sun and wind resources, PA recommends a feasibility study be done to determine the cost effectiveness for a specific hotel property.With Federal and State tax incentives and financing options, on top of the current cost of energy, these systems can payback as quickly as 2-3 years. Exhibit 1 provides a summary of state and utility renewable energy incentives. The following Federal renewable energy incentives are available, but are due to expire at the end of 20082:Clean Renewable Energy Bonds provide 0% interest rates whereby the borrower pays back the principal only.Corporate Renewable Energy Tax Credit provides a 30% tax credit on qualifying solar hot water, PV, and solar lighting (fiber-optic light tubes)Accelerated Depreciation provides for the depreciation of 50% in the first year, and the remaining 50% of the normal depreciation scheduleRenewable Energy Production Tax Credit provides for a tax credit of 1.5 cents per kilowatt hour for wind and biomass electric systems.
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