Are you leaving money on the table?
Attention building owners! Are you leaving money on the table? Did you know that a solar or other renewable energy system installed on your building will increase your Return On Investment? Have your advisors told you that you can adopt green building technologies and make more money?
Bottom line: a solar system installed on the roof of your building will reduce your energy bill. Reducing the cost of electricity will lower your operating cost. Since your NOI (net operating income) is a result of cash flow less fixed and variable costs, you increase your NOI. Most commercial buildings are sold on a capital rate basis, or "cap rate." The cap rate is equal to the NOI/value, thus you not only reduce your monthly operating expense. You increase the value and price for which you can sell your property.
An example we're making up to give you the basic idea:
- Your dentist buys his building which has a $50K/year in NOI on a 5% Cap Rate for $1M.
- He installs a solar system and reduces his electric bill by $10K/year, and
- His NOI thereby increases by $10K/year to $60K/year.
- The result: the value of his building is now $60K/.05 which equals $1.2M!
And he saved money on his electric bill every month he owned the building!
Don't Miss the Federal Tax Credit in 2008!
If you don't act fast, you will miss another valuable opportunity. You will miss this year's Federal Tax Credit that reduces the initial cost of a solar system.
The Federal Energy Bill passed in December 2007, did not extend the 30% solar related ITC (Investment Tax Credit) as it would have in the original draft. The ITC, that has been in existence since January 1, 2006 now rewards consumers with a 30% tax credit on all technologies that promote a form of solar energy. There is no cap on the amount of the credit for business users and there is a $2,000 cap for residential users. The new energy bill (H.R. 6) will revert the credit back to former 10% level for businesses and be discontinued for homeowners at the end of 2008.
To qualify for the Federal Tax credit a solar system must be fully commissioned. This means the system has been designed, installed, tested and placed into service, per IRS rules. Solar photovoltaic systems, for example, can take anywhere from 4-6 weeks on a residential rooftop and up to 6 months for commercial applications, depending on size and design complexity. Firms that have a solid reputation are already being inundated with last minute requests to get systems up and running!
Act now! For more information, contact us today!
