More greenbacks for green projects

The stimulus bill provides additional tax incentives for renewable energy projects

The American Recovery and Reinvestment Act of 2009 (commonly referred to as the stimulus bill), signed into law by President Obama on Feb. 17, contains more than $787 billion in government spending and tax incentives, including $63 billion directed to renewable energy programs and related tax incentives. The stimulus bill also continues federal benefits previously available to the industry.

The new cash grant program created by the stimulus bill allows investors and developers of certain renewable energy projects the option to receive a cash grant in lieu of tax credits, which are discussed below. The renewable energy community is excited about the cash grant, as it provides an upfront payment. 

The cash grant will be equal to 30 percent of the project costs for wind, solar, fuel cell, biomass, landfill gas, trash, qualified hydropower and marine and hydrokinetic renewable energy facilities and 10 percent of the project costs for microturbine, combined heat and power, and geothermal heatpump facilities. To be eligible for a cash grant, the facility must either be placed in service in 2009 or 2010 and otherwise be eligible for tax credits, or be placed into service after 2010 yet before the tax credit termination date, as long as construction of the facility began in 2009 or 2010. In all cases, the application deadline is Sept. 30, 2011. The grant program will be administered by the Treasury Department (not the Department of Energy), and the grant amount will be paid within 60 days of the later of the application date or the date the property is placed in service. The grant will not be deemed taxable income, but, similar to the tax credit programs, the grant would reduce the tax basis of the property. The particulars of the cash grant program are still being developed, and there might be additional reporting or other federal requirements for developers and investors who opt for the grant rather than tax credits.

In addition to creating the cash grant program, the stimulus bill extends the deadline of the already-existing production tax credit program. The deadline has been extended for three years, so for operational large-scale wind projects the deadline is Dec. 31, 2012, and for other renewable projects, such as geothermal, landfill gas, biomass and qualified hydropower, the deadline is Dec. 31, 2013.  PTCs are federal income tax credits based on produced energy generated from a renewable energy project (e.g., for a large-scale wind project, the current PTC rate is 2.1 cents/kilowatt-hour).

The stimulus bill also extends the deadline for the already-existing investment tax credit program.  In lieu of PTCs, developers may now claim a 30 percent investment tax credit for wind facilities placed in service before the end of 2012 and for biomass, geothermal, landfill gas, trash, qualified hydropower and marine and hydrokinetic renewable energy facilities placed in service before the end of 2013. ITCs are federal income tax credits that are based on a percentage of renewable energy project costs. The ITC amount is the same amount available under the cash grant program discussed above. Developers and investors must choose to take advantage of only one program (PTCs, ITCs or the cash grant) for each project. 

In addition to the benefits provided for large-scale projects, the Stimulus Bill also provides benefits to the developers of small-scale projects. One of these benefits is investment tax credits equal to 30 percent of the total installed cost of the system, which are available for owners of small wind systems on homes, farms and businesses.  Additionally, the stimulus bill provides for a tax credit for individuals of 30 percent of amounts paid for qualified energy efficiency improvements placed in service in 2009 and 2010, up to an aggregate of $1,500. 

Whether you have a large project or a small one, the stimulus bill was designed to encourage renewable energy projects. New incentives, plus the extension of old incentives, are now available for green energy developers. To receive federal government updates on the stimulus bill, please visit www.recovery.gov.

The Road Ahead

How the economy is affecting the lighting industry

Source: ARCHITECTURAL LIGHTING Magazine
Publication date: February 1, 2009

By Elizabeth Donoff

The current economic turmoil is forcing individuals and businesses to address an unprecedented set of challenges. While certain sectors such as the housing market have been completely blindsided, the lighting industry, both in design practice and manufacturing, is reacting somewhat differently. Firms and lighting companies have remained busy and it is only now, at the beginning of 2009, that the lighting industry is starting to see the impact of project slowdowns. What follows is an overview of some of the issues at hand for the lighting community as it navigates present economic conditions.

Overall, the lighting community has experienced unprecedented growth over the past several years. The architectural community at large is more focused than ever on the value of good lighting. Lighting designers, in the U.S. and abroad, were still indicating at the close of 2008 that they remained extremely busy and could not hire enough staff to support their project load. “There are just not enough lighting designers out there to meet the demand,” says lighting designer Brian Stacy, of Arup Lighting in New York. This is in part due to the limited number of university-based lighting design programs and the correspondingly small number of graduates entering the workforce each year. Additionally, there is a gap between entry- and senior-level professionals; past recessions removed the ever-valuable midcareer designer from the continuum as they left lighting for other industries.

While many architecture firms are being forced to cut significant percentages of their staffs, at present lighting design firms are not facing a similar situation. With a growing group of newly unemployed architects and designers looking for work, as well as recent architecture graduates entering a profession that is not hiring, one wonders if architecture's misfortune could be lighting's gain? Lighting designers could take advantage of tapping into new employee streams. But the opportunity may vanish quickly. As projects are canceled or put on hold, and the effects trickle down to lighting designers, they may lose the chance to recruit this potential human resource. The lighting community may be equally at risk of losing its own group of recent and new graduates from lighting programs, as they search for employment in other fields during these difficult economic times. “There are some upcoming graduates we'd like to hire,” says Glenn Heinmiller, principal at Cambridge, Mass.–based Lam Partners. “But given the economic situation, we need to be especially careful about our employment commitments.”

Many companies such as B-K Lighting, Day-Brite Lighting, Erco, Litecontrol, Martin, Selux, and Visa Lighting indicated stellar growth overall through the end of 2008, commenting generally that they had seen some of their highest sales figures to date. Brian Golden of Hanson, Mass.–based Litecontrol notes the company had experienced record shipments at the end of 2008. “There is no doubt that 2009 is expected to be difficult,” says Nick Bleeker, director of business development for Tupelo, Miss.–based Day-Brite Lighting.

Initially, when the U.S. housing and mortgage crisis began to reveal itself in summer 2008, lighting manufacturers were operating under production schedules with a 12- to 18-month outlook. From June to December 2008, manufacturers reworked these timelines to a more immediate three- to six-month window that will require designers and manufacturers to be much more efficient in their project planning. “We anticipate a slowdown in the next quarter as jobs are being pushed off by a month or two,” Golden says. Since November 2008, lighting manufacturers have seen a decline in quotes, an indicator in a general slowdown of new work.

In an effort to assess business cycles, designers and manufacturers alike are paying close attention to several construction- and lighting-specific economic indexes, including the American Institute of Architects (AIA) Architecture Billings Index (ABI) and the National Electrical Manufacturers Association (NEMA) Lighting Systems Index (LSI). In December, the ABI, for the second consecutive month, posted its lowest level since the survey was initiated in 1995: 34.7. The ABI has fallen below 50 for eight consecutive months. (Scores above 50 represent billing increases.) Inquiries for new projects scored at 38.3, also a historic low. A regional look indicates that the Northeast (39.5) remains busiest in terms of project activity followed by the South (36.8), West (33.5), and Midwest (31.4). In terms of project types, mixed practice (44.5) remains strong followed by institutional (40.8), multifamily residential (30), and commercial/industrial (26.7).

The LSI, the key index for lighting manufacturers, declined by 4.3 percent in the third quarter of 2008. And while the index has fluctuated over the past several quarters, overall it has contracted by 7.5 percent in the past year, and by 12 percent since the start of 2006. (Data from 2002 is used as the index's 100-point benchmark.) The third quarter of 2008 represented a point level of 92.5. Previous lows date back to the fourth quarter of 2006 (93.5) and the first quarter of 1999 (94.5). The low mark for the third quarter of 2008 indicates the reduction of domestic shipments for all six lighting equipment segments—ballasts, emergency lighting, lamps, lighting controls, luminaries, and solid-state lighting—with large lamps posting the greatest overall decline.

Not surprisingly, demand for residential lighting equipment was weak. Housing starts are limited, and builders still do not have a sense whether the market has hit bottom. Very few lighting design firms have concentrated their practices solely on residential work, and it appears that manufacturers will continue to feel a greater impact in this sector than designers.

With banks limiting credit and consumers being extremely cautious about new purchases, even energy-efficient lighting equipment, such as compact fluorescent light bulbs, has experienced a decline in sales according to the LSI. Belt-tightening consumers view the higher first-cost pricing of such products as a deterrent. While this might seem like a small point, it actually calls attention to a much more troubling scenario: The economic recession could stunt the growth and success of the green building movement.

Contrary to what the LSI indicates for the green residential market, lighting manufacturers who create products for the commercial sector remain confident that lighting specifiers will continue to request energy-efficient products. “It's about producing luminaires that optimize performance,” Day-Brite Lighting's Bleeker says.

for the rest of the article go to..... http://www.archlighting.com/industry-news.asp?articleID=862346&sectionID=1311