Energy Policy Act of 2005 EPAct 2005 and Lutron Lighting Controls

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Energy Policy Act of 2005 (EPAct 2005) and
Lutron Lighting Controls

• Tax Incentives for Lighting Control
• October 2006

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EPAct 2005 tax incentives

• Government is giving away money (in the form of
  tax deductions) for installing energy efficient
  commercial lighting systems
• Lutron lighting controls help you get that money
• This free money is icing on the cake. Its in
  addition to the year-over-year energy savings
  Lutron products provide

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What is EPAct?

• EPAct--Energy Policy Act of 2005
• EPAct 2005 is the biggest overhaul of national
  energy policy since 1992
• Provides tax incentives for energy efficient
  building systems
• NEMA estimates about 500M in additional sales of
  lighting systems and products as a result of this
  act

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Benefits of EPAct

• U.S.
• Reduced national electric demand by 312MW
• National carbon emissions reduced by 10 million
  metric tons
• Lighting Industry
• 500M in additional sales
• Building owners/municipal building designers
• Tax deduction

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3 ways to get EPAct tax deductions

• Complete Deduction
• Up to 1.80/ft2 deduction for modeled building
  energy cost reduction of 50
• Partial Deduction
• Up to 0.60/ft2 deduction for modeled building
  energy cost reduction of 16-2/3
• For upgrading one of the following Lighting,
  HVAC, or building envelope
• Interim Lighting Rules
• Up to 0.30-0.60/ft2 for 25-40 reduction in
  ASHRAE 90.1 2001 LPD (Lighting Power Density or
  W/ft2)
• Lutron lighting controls help meet the
  requirements for EPAct tax deduction regardless
  which of the 3 methods is used.
• See Lutron EPAct 2005 Summary for more details.
  
• Please consult with your tax advisor to
  determine the specific tax treatment appropriate
  for your situation.

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ASHRAE 90.1 2004 helps meet Interim Lighting Rule
LPD requirement
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Potential for free riding

• If a building already meets the requirements for
  a deduction, use the full 0.60/ft2 deduction
  for
• Lutron lighting controls (wallbox dimmers,
  occupancy sensors)
• Lutron lighting systems (EcoSystem)
• The full cost of the Lutron lighting controls
  would be eligible for the deduction up to the
  0.60 cap.

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Most commercial buildings are eligible

• Eligible buildings
• Buildings in the United States that are within
  the scope of ASHRAE 90.1-2001, Energy Standard
  for Buildings Except Low-Rise Residential
  Buildings (three stories or less).
• Publicly owned buildings such as schools, and
  rental housing (four stories or higher).
• Retrofit or new construction
• Ineligible buildings
• Non-profit buildings or non-government
  organization buildings such as churches
• Residential buildings less than three-stories

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Who can claim the tax deduction?

• Privately owned buildings
• Building owner
• Public owned buildings (schools, government
  buildings)
• Person/entity primarily responsible for design
  (i.e. Engineer, architect)

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Lutron lighting controls help meet the
requirements for EPAct

• All Lutron interior lighting control product
  costs are eligible for EPAct tax deductions
• Including costs of installation and factory
  commissioning
• Including shades when part of a lighting project

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Window of opportunity

• EPAct rules are for property placed in service
  from January 1, 2006 to December 31, 2007,
  inclusive.
• Congress is likely to extend the life and
  increase the benefits of EPAct

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Where can I get more information?

• Websites
• www.lutron.com/EPAct (coming soon)
• www.lightingtaxdeduction.com/
• www.nema.org/gov/energy/Energy-Legislation.cfmpol
  icy
• http//www.eere.energy.gov/buildings/info/tax_cred
  it_2006.html

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Prime EPAct Opportunities

• Projects
• LEED Projects
• ASHRAE 90.1 2004 projects
• New construction and renovation of commercial and
  institutional buildings (office building,
  schools, government buildings)
• Residential building four stories or higher
  (MDUs)
• Geographically
• ASHRAE 90.1 2004 states or states with similar or
  more stringent energy codes
• Target audience
• Municipal building designers/specifiers
• Primary designer of Federal, State, Local
  government buildings such as
• Offices, court houses, post offices, schools,
  police stations, libraries, town halls
• Commercial or high rise residential building
  owners
• Commercial design build contractors

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EPAct tax deductions are icing on the cake

• EPAct tax deductions are a one-time financial
  incentive
• Public utility companies may provide one-time
  cash rebates for using some Lutron products
• The biggest financial benefit comes from the
  year-over-year energy savings (and other economic
  benefits) that Lutron products provide

EPAct
Rebates
Energy Savings
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Commercial Electricity Prices
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Lighting accounts for most of a buildings
electricity usage
Annual Electricity Use in Office Buildings

• Lutron solutions can cut that usage by 40 to 60
  or more year-over-year through strategies such
  as
• Dimming
• Daylighting
• Occupant sensing
• Scheduling

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More Economic Benefits for Using Lutron

• Above and beyond energy savings, Lutron products
  provide the following financial benefits
  year-over-year much like an annuity
• Energy savings
• Reduced peak demand
• Reduced maintenance expenses
• Increased building valuation
• Improved employee productivity

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Lutron energy saving interior lighting control
solutions

• Total Building Control
• Digital microWATT
• EcoSystem
• LCP128
• Grafik 7000
• Switching Solutions
• SoftSwitch128
• LOS Occ Sensors
• Daylight Management
• Sivoia QED
• EcoSystem

• Room Control
• Wallbox Dimmers (Nova T, Nova)
• LOS Occ Sensors
• RadioTouch
• Grafik Eye 3000/4000
• Spacer System
• Balance LC (for classrooms)
• Workplace Lighting Control
• EcoSystem

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Product highlights
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Top 3 takeaways

• EPAct provides tax deductions for energy
  efficient lighting products.
• All Lutron lighting controls help meet the
  requirements for EPAct tax deductions and their
  costs are eligible for an EPAct tax deduction.
• The EPAct tax deductions are icing on the cake
  when compared to the year-over-year energy
  savings for using Lutron lighting controls.

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Call to action

• Educate your customers on the tax benefits of
  EPAct and the energy savings that Lutron products
  help them achieve.