179D Tax Deductions

Commercial building owners, owners of 4 plus story residential buildings and designers of certain buildings who invest in new construction projects or upgrades to their existing buildings may qualify for the § 179D tax deduction. There are multiple paths to claim the deduction, all of which require compliance with ASHRAE Standards and certification by a qualified professional.

To be eligible, improvements must enhance energy efficiency by targeting one or more of the following areas:

• Building Envelope - Energy efficient construction or improvements to walls, floors, roofs, fenestrations, and doors
• HVAC - Improvements relating to energy efficient HVAC systems
• Lights - Construction or improvements to building lights for energy efficiency

• Immediate tax relief to accelerated Return on Investment (ROI)
• Promotes sustainability and reduces carbon footprint
• Increased property value
• Attract and retain tenants
• Lower energy bills and reduced maintenance costs

For buildings placed in service in 2022 or earlier, you can claim up to $1.80 per square foot by installing systems that cut energy and power costs by 50% or more, based on ASHRAE Standard 90.1 benchmarks.

Starting with buildings placed in service in 2023 or later, the benefits get even bigger. You could qualify for up to $5.00 per square foot with systems that deliver just 25% energy savings compared to the baseline.