When most small business look for cost cutting tips to include in the office, they usually overlook their HVAC systems. Depending on the type of business you have, HVACs may play a huge role in your day to day business operations. And if a water system is a significant component of your small business, you may want to consider using a tankless water heater.
What Type of Businesses Can Use a Tankless Water Heater
Depending on the type of business you have (ie. a small gym, restaurants, laundromats, etc), with cold weather the use of hot water increases dramatically and will likely cost your business a considerable amount of money. Most businesses typically use a standard storage water heater however these heaters waste a lot of energy because they switch to “stand-by” mode when hot water is not in use. When switched on and in use, they take a while to warm up, causing you to wait and resulting in loss of business efficiency.
How Tankless Water Heaters Work
A tankless water heater is the perfect solution for those who want to save money. Tankless water heaters, which are also called instantaneous or demand water heaters, are becoming extremely popular these days because of their efficiency. Cold water travels through a pipe into the water heater and is then heated by an electric or a gas-fired element. As a result, hot water is instantaneous, and you don’t need to waste your time waiting for the water to warm up. These electric water heaters can also simultaneously produce and supply endless streams of hot water to multiple outlets without the hassle of temperature fluctuation. These units are so popular that even the U.S. Department of Energy recommends them.
What are the Benefits of Tankless Water Heaters
- Space Savings – tankless water heaters are compact units and in most cases can be wall-mounted units.
- Energy-Efficiency – 30-50% percent more energy efficient than a traditional water heater.
- Money-Saving – automatic shut off when the water supply is closed, resulting in lowered utility bills.
Federal Tax Credits for Tankless Water Heaters
Another money saving benefit is that businesses are eligible for federal tax credits if they use a tankless water heater. Businesses are eligible for up to $1500 Federal Tax Credits for use of these heaters.
On February 17, 2009, President Obama signed The American Recovery and Reinvestment Act of 2009, making great changes to the Emergency Economic Stabilization Act of 2008.
Under the new Stimulus bill:
- Tax credits previously expiring in 2009 will now be effective until December 31, 2009.
- Tax credits have been increased from 10% to 30%.
- Instead of limiting the tax credits to a specific dollar amount (ex: $300 for tankless water heaters), tax credits are up to 30% of the cost.
- The maximum credit has been raised from $500 to $1500; however some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1500 maximum.
Tax credits are available to consumers for 30% of the cost, up to $1500, in 2009 & 2010 (for existing homes only) for:
- Gas Tankless Water Heaters (non-solar, non-electric) placed into service before December 31st, 2010
- Water Heaters
- Windows and Doors
- Roofs (Metal & Asphalt)
- Biomass Stoves
How to get your tax credit:
- Choose a qualifying tankless water heater (see list above) that suits your needs.
- Manufacturer’s Certification Statement* is required.
- Save your receipts and Manufacturer’s Certification Statement for tax purposes.
- Use IRS Form 5695.
- Improvements must be “placed into service” (this generally refers to the installation, not the purchase) within the specified dates.
See the DSIRE database of state incentives, or contact your state energy office or local utility service providers for more information about tax credits and rebates in your area.