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The Section 179D – Energy Efficient Commercial Building tax deduction was originally passed in the Energy Policy Act of 2005, allowing commercial building owners and designers to claim this powerful tax incentive for designing and installing energy efficient equipment. Building owners can receive up to $5 per square foot on eligible buildings. Calvetti Ferguson is the expert in the Section 179D tax deduction and has the licensed Professional Engineers and CPAs on staff to identify and deliver a high-quality Section 179D study. 

To qualify for Section 179D, building owners must install new HVAC and hot water, interior lighting, or building envelope systems in their renovated or newly constructed properties. To qualify for the deduction, the equipment must meet minimum levels of energy savings as set by the Internal Revenue Service.  A building owner must have a qualified individual visit the property to verify the new systems have been installed and certify the energy analysis before a deduction can be claimed. 

What Qualifies for Section 179D?

Property building owners can qualify for Section 179D by using the checklist below to determine eligibility: 

1. Eligible building types

  • Commercial buildings 
  • High rise residential buildings (4 stories or higher)

2. Eligible construction project types

  • New construction
  • Additions
  • Renovations
  • Retrofits

3. Eligible energy efficient equipment

  • HVAC and hot water systems 
  • Interior lighting systems 
  • Building envelope systems

4. Eligible project completion dates

  • Projects completed on or after January 1, 2006. 

How Section 179D Benefits Building Owners

Section 179D tax deductions are one of several beneficial incentives for improving energy efficiency in commercial buildings. When combined with cost segregation studies, grants, enhanced property value, reduced operations and maintenance costs, and rebates, the net cost to building owners can be significantly reduced, speeding the ROI payback timeframe based on simple energy savings alone. In addition, special low-interest financing can help to cover the costs of installation. 

If you are a building owner that has or is planning to complete a renovation or new construction project, you may be missing out on this valuable tax incentive. Calvetti Ferguson will provide a free assessment of your projects to determine if they are eligible for the Section 179D incentive. 

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Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals across the country. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team stands ready to assist you. Please complete the form below, and we will follow up with you shortly.