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Green Building Blog

How to Claim the 179D Deduction for 2021 and Beyond

Thu, Apr 08, 2021 @ 08:52 / by Jim Newman

Popular energy efficiency tax incentive, 179D, made permanent. Indoor air quality improvements may qualify.

The Energy Policy Act of 2005 (EPAct 2005), Section 179D, established a tax deduction of up to $1.80 per square foot for qualifying structures, including a retroactive deduction for existing facilities that meet specific requirements. After several extensions, this beneficial tax credit was finally made permanent.Tax Law - Folder.  Closeup View.

We have been following this legislation and helping clients take advantage of it since it first came out in 2005, and then when it was first extended in 2012. Despite this potentially significant benefit for improving energy efficiency in commercial buildings, a relatively small number of building owners and managers are aware of the deduction and have taken advantage of it.

What Is the 179D Deduction and Why Should I Care?

As defined by the Office of Energy Efficiency & Renewable Energy (EERE), “The 179D commercial buildings energy efficiency tax deduction primarily enables building owners to claim a tax deduction for installing qualifying systems and buildings.”

Applied appropriately, that can translate into tens of thousands - or even hundreds of thousands - of dollars in tax savings. That kind of money can go a long way towards paying for the energy efficiency upgrades and green building improvements that can help make building operations cleaner, safer, more efficient, more environmentally responsible, and with better indoor air quality that can minimize the spread of viruses.money_jar

At Newman Consulting Group, we help our clients make the most of 179D cost savings opportunities, rebates and deductions. With an uncommon level of experience and insight in this area, we know how to maximize the benefits of this provision and file the required paperwork with minimal effort from the building owner or project manager.

What Lies Beyond 179D?

In addition to qualifying for Federal EPAct tax deductions, we can also help qualified projects access potential local utility rebates of up to 25% of the cost of materials, and we can also renegotiate gas and electric bills to generate additional savings.

Building energy efficiency upgrades that qualify for PACE financing (Property Assessed Clean Energy) can use this innovative financing mechanism for low-cost, long-term funding for energy efficiency, renewable energy and water conservation projects.

The green building solutions available through EPAct and PACE (where available) are available to owners and operators in a broad range of industries, including medical or educational institutions, sports arenas (such as ice rinks or gyms), industrial plants, automotive dealerships, restaurants, warehouses and more.

How are you covering the costs of Energy Efficiency Upgrades?
Leave us a comment below.

To learn about PACE financing or the specific 179D benefits that your business may be eligible to receive, contact Newman Consulting Group

Topics: PACE, indoor air quality, EPA, tax deductions

Jim Newman

Written by Jim Newman

Jim Newman's passion is helping us move toward a healthier and more secure future – for people and the planet.

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