Many Changes to Federal Laws Will Affect Electrical Industry at Start of New Year

Dec. 20, 2013
The New Year will bring some changes in the electrical industry due to government deadlines that will change the mix of products and incentives for projects.

The New Year will bring some changes in the electrical industry due to government deadlines that will change the mix of products and incentives for projects.

Say bye bye to the bulb. The most visible change, from the perspective of the general public, will be the final deadline in the Energy Independence and Security Act of 2007 (EISA) for ending the manufacture or import for sale of the classic 60W and 40W versions of the tungsten-filament incandescent lamp. This is the last New Year’s deadline in a phased elimination that began with the 100W version in 2012 and the 75W in 2013.

Before EISA was signed into law by President Bush in 2007, it’s hard to recall anyone singing the praises of the generic incandescent lightbulb, but the new law made lighting a political hotspot through two presidential elections, and national stories of people hoarding the legacy bulbs continue as we approach the deadline.

Lighting manufacturers are more than ready for the change, with broad offerings of alternative A-base light sources, ranging from halogen incandescents to compact fluorescents to the influx of new light-emitting diode (LED) lamps, standing at the ready to fill the vacant sockets with products that offer much lower energy consumption and longer life, and more options in lighting quality than ever. And the pipeline of new LED options is, by all accounts, loaded.

Tax deduction that drove lighting retrofits set to expire. The Energy-Efficient Commercial Building Tax Deduction (CBTD) that was part of the Energy Policy Act of 2005 (EPAct) will expire on Jan. 1, 2014, unless it’s reinstated in some form as part of Congress’ ongoing tax  reform negotiations. The CBTD was created to enhance the financial attractiveness of upgrading existing lighting to the most energy-efficient lighting and other building technologies. It allows the owner to deduct the entire cost of new lighting systems in a single tax year instead of depreciating it over a period of years. It applies only to retrofits completed before the Jan. 1 deadline.

The CBTD has been one of the drivers of the lighting retrofit work that kept many manufacturers, reps and distributors busy during the darkest days of the recent recession, and by some accounts it served its purpose. One rep we spoke to who is heavily involved in lighting retrofits in the Midwest said the deduction’s expiration may not have much impact on customer interest because the quality of the upgrades, improvements in the payback curve of the technology due to advances in efficiency, combined with utility rebates, have all made the EPAct deduction provisions a bonus factor that some customers don’t even bother filing for.

Production tax credits and other laws. A number of other tax credits and incentives are slated to expire Jan. 1., including the wind power production tax credit that was central to the business case of many wind-farm projects and has been extended several times since its inception. Tax credits for residential energy-efficiency improvements, for manufacturing of energy-efficient appliances and for construction of energy-efficient homes are also set to expire with the dropping of the New Year’s glitter ball.