Energy - Specialty Tax Advisors

The Energy sector involves massive capital investment, environmental and climate goals, technological development and innovation, and major updates to aging infrastructure, all areas that are candidates for tax incentives.

Ideal Candidates:

Renewable energy developers
Energy storage and grid tech companies
Construction firms working on sustainable projects
Energy-efficient builders and ESCOs
Utility infrastructure and component manufacturers

Here’s an overview of how Energy companies can benefit.

179D Tax Deduction

Energy companies that own or design commercial and industrial buildings, especially utilities or energy service companies (ESCOs) can claim:

Deductions up to $5.00 per square foot for installing qualifying energy-efficient lighting, HVAC, or building envelope systems

Who Benefits:

Building owners
Designers of government/nonprofit facilities (can be allocated)

Benefit: Immediate tax deduction for energy efficiency projects or retrofits.

Section 45 & 48 – Renewable Energy Production and Investment Tax Credits

For developers, owners, or investors in wind, solar, geothermal, biomass, or hydropower:

Section 45 (PTC): Ongoing tax credit based on energy production (cents/kWh)
Section 48 (ITC): One-time tax credit based on % of qualified project costs

Bonus: Credits increase if the project meets Prevailing Wage and Apprenticeship (PWA) standards or is located in energy communities.

Benefit: Up to 70%+ of eligible project costs covered through tax incentives.

45L Tax Credit

For companies building energy-efficient multifamily or residential units:

Up to $5,000 per unit for homes meeting Zero Energy Ready or ENERGY STAR standards

Benefit: Substantial offset to development costs of workforce or affordable housing.

What Services are Included?

Cost Segregation

Applicable to:

Facilities, power plants, substations, corporate headquarters, and renewable installations
Reclassifies components (e.g., electrical systems, specialized concrete pads, energy storage) into 5-, 7-, or 15-year property

Benefit: Accelerated depreciation = lower taxable income in early years.

Research & Development (R&D) Tax Credits

Qualifying activities include:

New energy storage systems
Grid optimization and smart metering
Hydrogen generation and carbon capture
Energy modeling and efficiency simulations

Benefit: Up to 10% federal credit + state credits for innovation.

IC-DISC (Interest Charge – Domestic International Sales Corporation)

Export Tax Incentive for US manufacturers of energy equipment, energy-related products, and renewable energy that are exported:

IC-DISC allows export profits to be taxed as qualified dividends

Benefit: 10–15% reduction in federal tax on export-related income.

Form 3115

A Form 3115 - Application for Change in Accounting Method, allows businesses to request approval from the IRS to change their accounting method. This form might be required when making changes to claim various tax credits.

Changing Depreciation Method
Inventory Method
Accounting for Repairs vs. Capital Improvements

Benefit: Tax relief through audit protection, improved financial reporting accuracy, potential tax benefits, and compliance with IRS Regulations.

Payroll Tax Reduction Strategy

Companies with W2 employees will qualify for this tax credit program.

Proven ROI with significant Payroll Tax savings recognized on first payroll cycle
Eligible employees see an increase in net take-home pay
Zero upfront or out-of-pocket cost to employer or employee
Attract and retain top talent
Audit compliance

Benefits: Employer FICA Tax Savings is $56.80 per month or $681.60 per year per eligible employee. Employee FICA/State/Federal Tax Savings includes an approximate 3-4% increase in monthly net take-home pay.