Renewable Energy Products Commercial Economic Advantages


Geothermal energy is smart.

Yes, renewable energy is great for the environment but importantly there are a number of financial benefits and incentives from government, manufacturers, and decreasing capital investment costs that make renewable technologies highly attractive compared to initial costs and the unpredictable cost of ownership associated with fossil or carbon-based fuel systems.

Significantly lower energy costs and predictable cost of ownership associated with renewable technologies is made possible by leveraging the readily available energy sources from the installation site as opposed to the dynamic costs of drilling, mining, processing, transporting, and Wall Street speculation.

For example, a commercial system shown in the table below assumes a geothermal system cost for a large office complex that requires constant temperatures year-round.

A geothermal system, while having higher initial cost, will in fact cost less to own and considerably less operate when compared to traditional fuel-based HVAC systems.

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Commercial *

 

New Construction

Retrofit

Replacement

Original Cost

$950,000

$575,000

$125,000

Annual Energy Cost (standard)

$125,000

$125,000

$90,000

Corporate Tax Bracket

40%

40%

40%

Depreciable Tax Basis

$902,500

$546,250

$118,750

Tax Credits and Benefits

 

 

 

Investment Tax Credit

$95,000

$57,500

$12,500

2011 MACRS

$54,150

$32,775

$7,125

2012 MACRS

$122,740

$74,290

$16,150

2013 MACRS

$73,644

$44,574

$9,690

2014 MACRS

$44,186

$26,744

$5,814

2015 MACRS

$40,793

$24,691

$5,368

2016 MACRS

$63,717

$38,565

$8,384

Total 5yr Tax Savings

$430,513.4

$260,573.9

$56,646.5

Actual Cost

$519,487

$314,426

$68,354

Annual Cost Savings

$70,000.0

$70,000.0

$20,000.0

Payback Period

7.4yrs

4.5yrs

3.4yrs

 

* Assumes 3rd Quarter In-Service



Economic Advantages Education, Commercial & Residential Economical Advantages pages:


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