Dealerships can save using clean energy rebates, loans or grants from local governments or utility companies. The amount available in rebates varies from location to location, but there are savings available in every state.
In addition, the federal government passed a tax deduction in 2005 that gives businesses a rebate of up to 60 cents per square foot if the lighting system in a new or renovated commercial building saves enough energy to meet specific federal standards. Businesses can get up to a $1.80 per square foot if they save energy in other ways as well.
The federal policy, part of the Energy Policy Act of 2005, expires Dec. 31. With the gridlock in Washington, it's not clear if the program will be continued into next year. Any dealership wanting to take advantage of the current tax deduction must finish lighting upgrades by the end of the year.
Still, not all dealers are rushing to apply for the tax deductions. Dunning Toyota-Scion in Ann Arbor, Mich., installed LEDs this year as part of a larger renovation, but the dealership has not decided yet whether it will pursue the federal deduction.
To get the deduction, commercial building owners must hire a mechanical engineer to verify that the building meets the federal requirements. Those tests can cost up to $10,000, said Josh Bloom, LEED project manager of Bloom General Contracting Inc., which worked with Dunning through the renovation.
For Dunning's 35,000-square-foot building, the deduction would net about a $7,000 after-tax value, Bloom said. He noted that the tax savings are more worthwhile if a dealership meets the more difficult standards for the $1.80 per square-foot deduction.
"The cost of doing it and pursuing it, in certain scenarios, level out or equal the benefit," Bloom said.
Herrick, the Missouri dealer, said the dealership has yet to take advantage of the tax benefits because the dealership renovations are so recent, but he plans on speaking with his accountant when tax time comes around next spring to make sure the dealership gets all the savings it can.
Said Herrick of the tax credits: "We'll certainly take advantage of them."