How Energy Efficient Regulations Can Save You Money

Electric motors are all around us. They play a large role in making our living and work spaces comfortable. But electric motors use energy to function. In the United States, electric motors consume almost a third of all electricity. That's according to a recent study from the Lawrence Berkeley National Laboratory.

The study inventoried all three-phase AC and DC motors greater than 1 horsepower in commercial and industrial equipment. That includes fans, blowers, air compressors, refrigeration, and material conveying. The researchers found almost 53 million of these motor systems in the U.S today. Of that number, more than 41 million motors are found in commercial facilities. Commercial facilities include hospitals, universities, restaurants, retail establishments, and hotels. These motors account for 26 percent of overall energy consumption.

With so many electric motors in use, reducing energy consumption and improving efficiency is important. Not only is reducing energy use good for the environment, it can also save you money. The government has driven reducing consumption through energy efficiency standards and rebate programs. Taking steps to reduce energy use can also lower operating costs for business owners. Many of these steps involve making buildings and spaces more efficient.

Two important pieces of legislation relating to commercial building energy efficiency are the Consolidated Appropriations Act of 2021 and the Energy Act of 2020.

 

 
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Consolidated Appropriations Act of 2021, Section 179D

Section 179D of the Consolidated Appropriations Act provides a tax deduction for energy efficiency. Qualifying improvements can earn a $1.80 per square foot reduction. Commercial building owners or designers must show a 50 percent reduction in energy usage. Improvements include heating, cooling, ventilation, hot water, and lighting upgrades. Improvements that don’t reach the 50 percent reduction can still qualify for partial deductions up to $.60 per square foot.

For a 100,000 square foot commercial building, this tax credit can add up very quickly. Often the tax reduction would pay for the upgrade of your electric motors and fan blades. For example, you could retrofit an ECM motor (variable speed motor) and better fan blades. You could also choose a fan motor assembly (ECM and fan combination). Variable speed motors provide constant airflow at different speeds.

For a rooftop AC unit, running low stage AC (instead of running it at either 100 percent or off) allows you to vary the speed and take it down to a lower percentage. This can save 25 percent efficiency. For another example, using ambient air allows you to stop running the compressor. Rather than relying on a compressor that uses a lot of energy, you can pull outside air. This allows a gain of 40-50 percent efficiency by reducing the speed of the blower motor.


Energy Act of 2020, Section 1005

Section 1005 of the Energy Act of 2020 establishes a rebate program. This program encourages the replacement of inefficient electric motors 1 horsepower or larger. The section defines a motor, electronic control, and extended product system. Requirements include:

  • Variable speed or multispeed operation;
  • Partial load control that reduces input energy requirements;
  • The motor has greater than one horsepower; and
  • The motor uses extended product system technology.

The Department of Energy recently published a draft minimum base level of efficiency and extended product system information. Qualified extended product systems include commercial or industrial machinery or equipment that:

  • Includes electric motors and electronic controls;
  • Reduces the input energy (as measured in kw-hours) by no less than 5 percent as compared to base levels to be set by the secretary;
  • Incorporates system that has greater than 1 horsepower into redesigned machinery or equipment;
  • Did not make use of extended product system before the redesign as described/defined by the secretary;
  • Was in service before and placed back into service during calendar year 2021 or 2022.

You can determine the rebate amount by multiplying the sum of the nameplate rated horsepower (qualified motor and electronic control) and $25. The maximum rebate amount per qualified entity cannot exceed $25,000 per calendar year. The total appropriation is $5,000,000 per fiscal year 2022 and 2023.





With available tax credits and rebates, now is a great time to consider a replacement motor strategy. Retrofitting energy efficiency improvements for your business can also provide significant savings. Regal’s Marathon® SyMAX-i® line offers direct drop-in replacements to deliver enhanced savings for your air moving operations. For more information on the SyMAX line and Marathon distributors in your area, visit our Where to Buy section below!

 

 

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