WORTH CELEBRATING

Eligible hotels can use REAP Grants for renewable energy systems and improvements to HVAC systems, insulation, lighting and refrigeration. 

• La Quinta Inn and Suites in Danbury, CT received a REAP grant in the amount of $25,081 to offset the $100,325 to install two solar thermal systems providing hot water to the hotel and saving enough electricity to power 12 households.

• Super 8 Hotel in Bowling Green, KY received a $72,900 grant to offset the $291,600 cost to install a solar power system operating the hotel. The renewable energy system reduces their electric bill by $21,238 annually - enough energy to power 15 homes.

• The El Rancho Motel in Yuma, AZ received an $18,711 grant for the installation of a solar panel system. The system generates enough electricity to save the property 98.31% of its energy usage and $5,122 a year in electricity costs

Especially advantageous for hotel owners with an upcoming PIP renovation, or just wanting to spend any amount of money on an acquisition, renovation, or refurbishment, the 2018 Tax Bill initiates 100% bonus depreciation on acquisitions.

Implementation of most new FF&E/CapEx projects are depreciated in year 1 instead of spreading it out over 6 years, thereby reducing the payback period and allocating the upfront cost of a new investment over time.

The 26% federal investment tax credit (ITC) is among the most important incentives currently available for clean energy solutions that can be claimed on federal corporate income taxes for 30% of the cost of eligible systems .

The 179D Commercial Buildings Tax Deduction allows property owners who pay taxes to claim deductions for newly constructed or energy renovated hotels four stories or higher.  A hotel qualifies for up to $1.80 per square foot ($0.60 per square foot for each system) deduction calculated from the installation of energy-efficient assets, including HVAC, building envelope and lighting.

Responding to a growing trend in the hospitality industry of guests seeking out only hotels that are LEED certified or have installed energy efficient and alternative technologies, hoteliers can take advantage of a tax credit for anywhere between 10-30% of the project cost.  Geothermal, combined heat and power (CHP), wind, solar P.V. are common technologies that are eligible for the alternative energy credit. Between the tax credit and the large continued energy savings, alternative energy projects can have a surprisingly short payback period for hotel owners.