Third party investing in energy programs

Conference · Tue Jun 01 04:00:00 EDT 1982 · Energy Technol. (Wash., D.C.); (United States)

OSTI ID:5613837

Rauch, R J

A new energy industry--the recovery of energy from the industrial sector by means of conservation equipment--is just forming. Capital costs retard progress. This problem has given rise to third party leasing plans. The Alliance to Save Energy has embarked on a feasibility study, and a few preliminary findings are revealed in this paper. Leasing has IRS problems because of the tax classification of ''limited use properties.'' Useful life for tax purposes is also much shorter for general capital equipment than for conservation equipment. The Economic Recovery Act liberalized limited use and useful life rules, with new ''safe harbor'' lease arrangements. But broad interpretation of safe harbor has caused problems. Energy service contract--the second type of third party leasing--carries with it substantial specified risks. Share-the-savings leasing arrangements offer significant benefits to energy users, but all tax risks are shifted to the third party. In conclusion, several legal obstacles must be overcome before energy conservation investment by means of third party leasing can expand.

• Research Organization: Koteen and Naftalin
• OSTI ID: 5613837
• Report Number(s): CONF-820217-
• Conference Information: Journal Name: Energy Technol. (Wash., D.C.); (United States) Journal Volume: 9
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320304* -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes-- Waste Heat Recovery & Utilization
CAPITALIZED COST
CONTRACTS
COST
ECONOMIC RECOVERY TAX ACT
ENERGY CONSERVATION
ENERGY RECOVERY
EQUIPMENT
FEASIBILITY STUDIES
FINANCIAL INCENTIVES
HEAT RECOVERY
HEAT RECOVERY EQUIPMENT
INDUSTRIAL PLANTS
INVESTMENT
LAWS
LEASING
LEGAL ASPECTS
RECOVERY
RISK ASSESSMENT