Green Partners
The city council has just passed Int No. 1253, which is awaiting the mayor’s signature as this article is written. The bottom line is that by 2050, there will be a required reduction of Greenhouse Gasses in New York City of 80%. To achieve this mandated goal, buildings will be evaluated on the basis of the totality of their energy consumed, which includes electric as well fuel for heating and hot water. While the city is prepared to set emission limits on the burning of fossil fuels, such as oil gas and coal in individual buildings, the better and most cost effective solution is to reduce electric consumption as soon as possible, to try and avoid the city stepping in and imposing emission limits.
Electric consumption reduction can be achieved in two steps. Proceed with Local Law 88 requirements including the LED upgrade for common areas in multifamily properties and the building wide LED upgrade in commercial properties. These required steps will result in significant savings as electric consumption will be reduced by 50% on average. In residential buildings consider taking the LED upgrade a step further. Encourage building residents, on a voluntary basis, to upgrade to LED. Some assistance may be required to ensure that the LED replacement products meet required aesthetics in apartments, but the energy reduction is well worth it.
There are additional mandates that tie into this overall 80% Carbon Reduction Goal, including building emissions restrictions for buildings that do not meet goals that commence in 2022. To monitor these requirements, there will be annual audits for every building conducted by a Registered Design Professional. This proposed Local Law covers buildings that are 25,000 s/f and larger. Since the fines are huge for non compliance, buildings will have no choice, but to comply. The limits on building emissions will start in 2022, so make sure that LED upgrades are completed well before 2022.
As soon as this Local Law is signed by the mayor, there will be more information publicized.
As meeting these mandates may involve investment, we further recommend reaching out to your accountants to discuss tax advantaged strategies that are available. Review EPAct 179D which is applicable to buildings that pay taxes, such as commercial buildings, hotel and rental properties. This tax provision allows immediate deductions for the cost of energy saving measures to offset income as opposed to an amortization schedule that allows gradual deductions against income.
If your accountant is not set up to handle EPAct 179D submissions, there are a small group of tax providers that have the qualifications and computer capabilities to meet these requirements and can coordinate the related tax preparation with your own tax provider. All that is needed are the details or drawings of your LED or energy savings project. Most of these tax providers will review your project on a complimentary basis. To proceed with the actual documentation and the required computer model, there is a small fee based of tax savings realized.
One example of a well established tax provider specializing in this work is Energy Tax Savers. Their website, is www.energytaxsavers.com, contains helpful information with regard to EPAct179D including an online webinar.
George Crawford is the principal of Green Partners, New York, N.Y.
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