Energy Policy Act (EPAct) 179D Tax Deduction

 

The Energy Policy Act (EPAct) of 2005 Section §179D offers a Tax Deduction of up to $1.80 per square foot of a new construction or addition/renovated commercial building. You may be eligible!

 

Who is Qualified?

Deductions are available to owners of private buildings and designers of public government-owned buildings. Government-owned facilities allow the deduction to be allocated to the designer. Owners, designers, and architects must have energy efficient buildings placed in service from January 1, 2006 through December 31, 2016. 

Eligible Work:     New Construction • Remodels • Additions • Tenant-Owned Leasehold Improvements • Upgraded Facilities

 

How EPAct §179D works:

There are three sections pertaining to the 179D analysis. These sections include lightingHVAC, and building envelope systems, each section is eligible for up to $0.60 per square foot deduction.

  • To qualify for a $0.60 per square foot deduction, an energy improvement must be made in one of the three 179D sections (lighting, HVAC, building envelope) and improve the estimated total annual energy cost by the required percentage over the ASHRAE 90.1-2001/2007 baseline model of your building.

  • The interim rule is another way to achieve up to $0.60 for lighting only. To qualify as an interim rule property, the overall lighting power density must be 25% or more (based on a sliding scale, a minimum of 25% must be reached for a $0.30/sq ft deduction and anything 40% or over (50% for warehouse) is $0.60/sq ft).

  • To qualify for a $1.20 per square foot deduction, an energy improvement must be made in two of the three 179D sections (lighting, HVAC, building envelope) and improve the estimated total annual energy cost by the required percentage over the ASHRAE 90.1-2001/2007 baseline model of your building. Each incorporated component must also be able to qualify individually for a $0.60 per square foot deduction.

  • To qualify for a $1.80 per square foot deduction, an energy improvement must be made in all three 179D sections (lighting, HVAC, building envelope) and improve the estimated total annual energy cost by an aggregate 50% or more above the ASHRAE 90.1-2001/2007 baseline model of your building.

ENERGY STAR for Commercial Buildings may qualify for EPAct 179D!

The ENERGY STAR Label is one of the most recognizable labels in the United Sates. Companies now want their buildings to reflect the high standards and quality of their work environment, and ENERGY STAR is a straight forward and cost effective approach to achieving this goal.   A company that earns the ENERGY STAR Label on their building is not only displaying environmental leadership and social responsibility but are also reducing everyday operating costs, increasing profit margins and enhancing their image by choosing to certify their building with a credible brand. Learn more about ENERGY STAR.

Developers that obtain ENERGY STAR may also qualify for the 179D Tax Deduction, up to $1.80 per square foot for using energy efficiency measures.

How to Qualify:

In order to determine if your building is eligible, EDSS collects the design documents of a given project to interpret the energy efficient features implemented into the project and will run an analysis of the building to determine what EPAct 2005 §179D deductions are available.

Download a copy of our Information Checklist here. Once filled out, email your checklist to This email address is being protected from spambots. You need JavaScript enabled to view it.

 

To learn about the specific 179D benefits that your business may be eligible to receive, click the button below

find out if you qualify 

 

Subscribe to our News Blog to follow the latest on EPAct 179D and other services- Click here.

For More Information: