ENERGY AUDITS. Comprehensive energy audits uncover hidden inefficiencies that aren’t obvious in daily operations. These may include equipment running unnecessarily overnight, poor insulation, leaking ductwork, or oversized systems. An audit provides a roadmap, prioritizing the most cost-effective improvements. Together, these measures create a foundation for ongoing savings and make properties more resilient to rising utility rates. INCENTIVES AND TAX BENEFITS The economics of energy efficiency become even more compelling when incentives are factored in. Utilities, states, and the federal government offer generous programs that reward building owners for making efficiency improvements. UTILITY INCENTIVES AND REBATES. Many local utilities offer rebates covering a portion of project costs, sometimes reducing out-of- pocket expenses by 20–50%. TAX ADVANTAGES. Under the Modified Accelerated Cost Recovery System (MACRS), energy efficiency investments qualify for accelerated depreciation. In 2025, owners can deduct up to 40% of eligible equipment costs in Year One. Tax benefits can differ by state and ownership model, so it’s wise to work with your tax advisor to confirm eligibility and maximize deductions. FEDERAL AND STATE PROGRAMS. Various grants, credits, and low- interest financing programs further reduce costs, often making projects cash-positive in the very first year.
buildings. Unfortunately, many operate at suboptimal efficiency. Units cycle more frequently than necessary, run at higher speeds, or fail to adjust to actual tenant usage patterns. Replacing entire HVAC systems is often capital-intensive and disruptive. But the good news is that optimization technologies now allow owners to reduce HVAC-related energy costs by 10–30% without equipment replacement. These solutions fine-tune existing systems to help them perform more efficiently by ensuring they operate only when and how they are needed. The financial benefits are immediate and clear: 12–24 month payback periods on average. No upfront capital investment required in many programs. Extended equipment life, reducing future replacement costs. For Affordable Housing, where tenant comfort is critical, these improvements also stabilize indoor conditions, an operational win that enhances resident satisfaction. BEYOND HVAC: LIGHTING AND ENERGY AUDITS While HVAC optimization often delivers the largest savings, other measures offer quick wins with strong returns. LED LIGHTING RETROFITS. Replacing outdated fluorescent or incandescent lighting with LEDs reduces lighting energy consumption by 50–70%. In multi-family properties, this means safer, brighter common areas and reduced maintenance costs thanks to longer bulb life. Payback periods are often less than two years.
table each year. At a 6% capitalization rate, that savings translates into roughly $670,000 of increased property value. This multiplier effect is what makes energy efficiency such a compelling strategy. It’s not just about cutting costs; it’s about converting avoided expenses into long-term equity growth. HVAC EFFICIENCY: THE LARGEST LEVER Heating, ventilation, and air conditioning (HVAC) systems are the single largest energy consumers in multi-family
thinkrealty.com | 29
Made with FlippingBook Online newsletter