Resources for Accessing Energy Efficiency Incentives

Author: Jacob Johnston

Financial incentives can increase the rate-of-return and reduce the financial risk of energy efficiency improvement projects and retrofits for manufacturing plants.  With a vast array of independent federal, state and utility incentives, with varying scopes and applications, can be difficult to distinguish among the myriad amount and types of energy efficiency incentives available to industrial end users.  Thankfully, there are numerous resources available to help assess and evaluate the potential financial impact of incentives for industrial energy efficiency projects.

DOE’s Advanced Manufacturing Office Resources

The Department of Energy’s Advanced Manufacturing Office (AMO) has recently created a database to help both large and small manufacturers find not only financial incentives, but also a wide range of resources that can offset the cost on implementing energy efficiency improvements. The State Incentives and Resource Database is easily searchable and can be filtered by system type, resource type (assessment, grant, loans, etc.), program sponsors, and geographic scope – revealing a variety of valuable incentives. In addition, AMO recently published a Boiler MACT Technical Assistance program, which provides an overview of financial incentives available for companies affected by the new EPA MACT rules. Under this program, DOE is piloting a direct technical assistance initiative for boiler owners and operators in Ohio to demonstrate strategies, such as CHP, that can help them comply with the new boiler MACT rules.

The Database of State Incentives for Renewable & Efficiency

The Database of State Incentives for Renewables & Efficiency (DSIRE), a project of the North Carolina Solar Center and the Interstate Renewable Energy Council, contains a well-organized catalog of available incentives for both state and federal renewable and efficiency measures.

For example, the current (and often evolving) criteria and qualifications of the Modified Accelerated Cost Recovery System + Bonus Depreciation are well outlined.  For 2012, the bonus depreciation deduction for applicable projects placed into service has shifted from 100% to 50%.  While available for many renewable energy technologies, the bonus depreciation is also applicable for Combined Heat and Power (CHP) projects – a critical and currently under-utilized efficiency resource that can yield significant energy savings.

The DSIRE also outlines state programs such as Cape Light Compact’s incentives for industrial facilities in Massachusetts.  This program, which offers up to $150,000 for retrofits or new construction, includes incentives for zero-loss condensate drains, variable speed drives on motor-driven systems, chillers, and air compressors among many other upgrades and efficiency measures. 

A Resource for the Northwest: Bonneville Power Administration’s Energy Smart Industrial Program

Bonneville Power Administration has engaged industrial users in energy efficiency projects through their Energy Smart Industrial Program.  A unique program model, Energy Smart Industrial partners with industrial facilities to provide technical project expertise for energy efficiency measures. The incentives vary based on funding, but have been as high as 70% of the incremental cost in new construction or 70% of the retrofit cost of a more efficient alternative. The technical resources can help identify points of inefficient energy use and determine how to address them, and a fact sheet on the program is available from Bonneville Power Administration.

Legislative Updates: ESICA & Smart Energy Act

Two recent bills seek to provide additional incentives for manufacturers. The Energy Savings and Industrial Competitiveness Act (ESICA) of 2011 [full text of the bill as amended; Alliance summary, introduced by Sen. Jeanne Shaheen (D-N.H.) and Sen. Rob Portman (R-Ohio), provides funding for loan programs designed for industrial manufacturers’ energy efficiency projects.  The complementary bill in the House, the Smart Energy Act [full text of the bill as amended; Alliance summary], introduced by Reps. Charles Bass (R-N.H.) and Jim Matheson (D-Utah), offers a loan guarantee program for building efficiency upgrades.

Accessing organized, centralized databases can reveal an abundant supply of unexpected financing options for industrial energy efficiency measures, increasing the rate of return and reducing the risk of the projects.