Tax Considerations

Power Efficiency Guide

Ultimate Guide to Power Efficiency

Get Instant Access

Tax-deductible expenses such as maintenance, energy, operating costs, insurance, and property taxes reduce the income subject to taxes.

For the after tax life cycle cost analysis and payback analysis the actual incurred and annual savings is given as follows.

where

AS is the yearly annual after tax savings (excluding effect of tax credit)

E is the yearly annual energy savings (difference between original expenses and expenses after modification) D is the annual depreciation rate I is the income tax bracket.

Equation 9-23 takes into account that the yearly annual energy savings is partially offset by additional taxes which must be paid due to reduced operating expenses. On the other hand, the depreciation allowance reduces taxes directly.

Was this article helpful?

0 0
Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook


Post a comment