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Energy-Efficient Commercial Building Section 179D Tax Deduction

The Section 179D Energy-Efficient Commercial Building Tax Deduction applies to the design and installation of "green" building incentives in areas of interior lighting, HVAC, hot water, or building envelope systems in commercial buildings.

Who Can Save?

The Federal Energy-Efficient Commercial Building Deduction can potentially save building owners and lessees who make energy efficient improvements thousands. Qualifying commercial buildings include:

  • Apartment buildings (at least 4 stories)
  • Industrial buildings
  • Office buildings
  • Retail buildings
  • Warehouses

Designers of government-owned buildings such as architects, engineers, contractors, environmental consultants or energy services providers are also eligible to collect the credit for new construction or renovations performed on government buildings such as:

  • Airports
  • Courthouses
  • Libraries
  • Military bases
  • Schools
  • Town Halls and others

How Much Could You Save?

The tax provision was initially enacted under the 2005 Energy Policy Act (EPACT) and allows for a tax deduction of up to $1.80 per square foot. Buildings can partially qualify for $0.60 for HVAC, $0.60 for building envelope, and $0.60 for Lighting systems.

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