EPAct 2005 - a snapshot view

The Energy Policy Act of 2005 (EPAct 2005) offers a tax incentive program for the use of energy-saving technologies, including lighting. It is a tax deduction incentive, meaning that deductions are applied to reduce taxable income.

To be eligible for lighting-related deductions, lighting power density (LPD) must be 25-60% less than ASHRAE/IES Standard 90.1-2001. The lighting must also meet applicable IES recommended practice and be wired for dual switching. If criteria are met, a federal income tax deduction of up to $0.60 per square foot may be granted.

The following table can help you estimate potential deductions.

Reduction of LPD below Standard 90.1-2001	25%	26%	27%	28%	29%	30%	31%	32%	33%	34%	35%	36%	37%	38%	39%	40%	>40%
Eligible tax deduction per square foot	$0.30	$0.32	$0.34	$0.36	$0.38	$0.40	$0.42	$0.44	$0.46	$0.48	$0.50	$0.52	$0.54	$0.56	$0.58	$0.60	$.60

The LED Benefit: LED sources should be considered alongside other energy-efficient lighting technologies to help reduce power loads. In addition to consuming less energy than many conventional sources, LED products do not radiate heat. This in turn can reduce the loads typically attributed to cooling systems.

For more comprehensive information:

U.S. Department of Energy's Building Energy Codes Program

Database of State Incentives for Renewables & Efficiency (DSIRE) - a comprehensive source of information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency

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