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Evaluate the economic viability of sustainable design strategies in order to help substantiate decisions around design strategies.

Energy models of the base and design loads and the knowledge of local incentive programs are required to establish project payback, or Return on Investment (ROI).

Step 1
Net Incremental Cost (Capital cost investment)
Initial budget increase, due to applied strategy (i.e. baseline IGU with ASHRAE defaults versus higher performing skin), deducting
• [Investment Tax Credit: 30% federal tax credit (ITC); expires in 2016]
• [Cost reductions in other systems, as a result of the applied strategy, i.e. less mechanical equipment due to lower peak loads]

Step 2
Annual cost saving [$/yr] (Annual and/or Operational Cost Savings)
• Accelerated depreciation (MACRS)
• Energy savings due to reduced energy consumption (Baseline versus Design Case)
• Energy Generation

Step 3
Calculate ROI (using incremental after tax cash flow analysis)
• Net Incremental Cost [$] / Annual cost saving [$/yr] = ROI [yr]

Incentives can help offset first cost and shorten the return on investment. The amount of financial benefits varies depending on the strategy and the project location.

ROI can help offset first costs in order to help clients make informed economic decisions regarding sustainable design strategies

Available incentives and rebates vary depending on the project location - see above URL for the Database of State Incentives for Renewables and Efficiency (DSIRE).