Data from the Washington, D.C. -based U.S. Department of Energy estimates warehouses account for 8 percent of the total energy consumption for all commercial buildings. Gas-fired space heating consumes about half the on-site energy of warehouses. This totals 200 trillion BTUs per year. A 35 percent reduction of the energy used to heat all existing warehouses will save 700 million therms. At $1 per therm, a 35 percent energy savings will reduce national warehouse operating costs by $700 million dollars annually.
Saving energy also means a corresponding reduction in carbon-dioxide emissions. A 35 percent reduction in the energy used to heat all the warehouses in the U.S. will reduce carbon emissions by 3.6 million metric tons per year.
Therefore, installing a new warehouse heating system will save energy, reduce the building’s carbon footprint, and increase profits for owners and tenants. Best of all, Federal Energy Policy Act, or EPAct, tax deductions now are available for energy-efficient space-heating systems when used in eligible warehouses. (An engineered tax-services firm will be able to confirm whether a warehouse is eligible.) The decision to retrofit an existing warehouse with the right energy-efficient heating system can be “a no-brainer.”
EPAct provides a tax deduction of up to 60 cents per square foot for the installation of qualified, energy-efficient heating systems. Being qualified by an engineered tax-services firm is new for warehouse heating equipment. Currently, direct-fired blow-thru heaters are the only type of warehouse heating system that is pre-qualified by energy modeling but more companies and, therefore, heating systems are likely to get involved with the EPAct tax deductions.
The expense to remove an old heating system and total cost to purchase, install and startup a new warehouse heating system qualify for the tax deduction. Up to $1.80 per square foot tax deduction is available when a new heating system is combined with the installation of other energy-saving systems for lighting or the building envelope. Energy modeling by an independent consultant using Washington-based Internal Revenue Service-approved software and an on-site inspection by a qualified engineer are required for the tax deduction.