What Energy Credits Can Small Businesses Take?

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If you’re a small business owner, you’re one of a group of tens of thousands of Americans whose enterprises, combined, form the backbone of our nation’s economy. Small businesses furnish employment and drive economic development, while working to enrich and improve their local communities. Like other small business owners, you’re most likely concerned with business tax credits: money-saving incentives which the government offers to business owners, but which are classically associated with the world of “big business,” national and international-level industry. In fact, there are tax credits that small businesses can take, to help bolster their bottom line during trying economic times. According to the Small Business Administration, energy credits are among the most accessible tax credits for small businesses, but they also represent one of the most underserved areas: many business owners fail to take advantage of all that is available to them.

So, what energy credits can small businesses take?

Home Builders

Within the home construction industry, as with most industries reliant upon contracted labor, energy efficient measures are transforming the landscape of modern life. New homes are being built in ways that are designed to stand up to the elements, provide better insulation against cold temperatures, allow more efficient air circulation, and rely less on artificial lighting. Because of this, there are energy efficiency tax credits available to businesses which are involved in the building of new homes. In addition to businesses which provide construction services, this also applies to businesses that fill an ancillary function, such as specialists in electrical work, plumbing, and heating and air conditioning.

Manufacturing Industry

Many manufactured goods are manufactured in environmentally friendly ways, or are made using recycled materials, which helps to reduce their carbon footprint. Modern appliances often feature energy efficiency settings to help reduce electrical costs. Electricity isn’t the only resource being more sustainably managed in our increasingly green society, either: appliances that use water are experiencing a cascade of innovative alterations, some of which reflect changes in designs that have stood for decades, or even hundreds of years. Using less water makes sound environmental sense, as well as reflecting a reduced expense for those who employ such devices over time. The manufacturing of energy efficient products translates into viable tax credits for businesses involved in their design, production, shipping, marketing, and sales.

Sustainable, Environmentally Friendly Vehicles

Today, a growing number of vehicles are powered by a battery, or by a combination (“hybrid”) of traditional gasoline and electrical power. Other, alternative fuel sources also exist, such as vehicles which have been adapted to use everything from water to used cooking oil as a source of fuel. Regardless of the industry in which you’ve established yourself, the commercial use of vehicles which take advantage of alternative energy sources is good for a tax writeoff. These vehicles aren’t simply environmentally friendly: performance varies from one type of power to another, but they generally offer a mixture of direct financial savings and practical benefits.

Environmentally Friendly Commercial Buildings

Finally, regardless of your industry or business type, you can save money through tax writeoffs relating to your commercial property. This touches on some of the matters raised for home builders: are your commercial property’s wiring and plumbing systems up to modern specifications? Do you use energy-efficient lighting, and take advantage of natural lighting as much as possible? These, and other improvements over the practices of bygone decades (such as energy-efficient heating, ventilation and air conditioning, energy efficient windows, and efficient, environmentally-friendly insulation) can add up to serious financial savings through widespread application, even if your business isn’t directly involved in the manufacture or installation of such features.

Related Resource: What is a Non-Profit Corporation?

By staying informed on what tax credits are available to you as a small business owner, you will be better positioned to avail yourself of all of the resources available to support your enterprise. For some businesses, particularly those that are five years old or less, tax credits can mean the difference between failing to remain viable or enduring to the point of self-sufficiency. In addition to making sound environmental sense, energy efficient measures reflect a responsible, practical approach to doing business, one that can’t help but to have wide-reaching benefits for the operation of an organization as a whole.

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