179d Energy Efficient Tax Deduction

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Financial Benefit 

  • Unlike the privately held buildings, the benefit from the deduction for the public projects is much clearer. This is because this is an additional deduction that the design firm would not see on their tax return otherwise.  It is essentially free money for the design firm. It's the governments reward to design firms that promote energy efficiency.

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  • The financial benefit depends on the design firm's tax rate, energy savings and building size. On average, for every 100,000 SF of highly energy efficient building designed translates to deductions of $180,000 and tax savings of $60,000​

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  • Visit our Calculator to estimate your project's financial benefit 

Architectural, Mechanical, lighting design firms + contractors 

Eligibility

  • Design firms are qualified for the 179d deduction on public building projects because the IRS allows the deduction to be allocated from the public (non-tax paying) building owner to the Design Firm

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  • The energy efficient equipment must have been put into operation within the last three years. The tax deduction for design firms must be taking the year the project was put into operation. Tax returns are considered open if they are within the last three years.  Public buildings put into operation in the past 3 years are all qualified projects as these tax returns are still open and can be amended.

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  • Buildings that qualify must be owned by a public non-tax paying entity.  Some example buildings are schools, courthouses, municipal buildings and military facilities. The building must be located within the United States​

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  • Buildings that do not qualify: churches, buildings owned by non-profits, buildings owned by religious institutions

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  • One designer can be allocated the entire deduction or the aggregate amount can be split between multiple designers as determined by the government entity

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  • The designer is a person that creates the technical specifications for installation of energy efficient commercial property. For example, an architect, engineer, contractor, environmental consultant or energy service provider who creates the technical specifications for a new building or an addition to an existing building. A person that merely installs, repairs, or maintains the property is not a designer​​

certification process

      1) Contact us with your project information. Provide the following information: building address, building owner, impacted squ​are footage (area affected by the energy efficient upgrade), year equipment was placed into service and the type of energy efficient equipment and building systems​.


      2) Greenergy reviews your project and determines if it is an eligible building, approximate your tax deduction and determine your tax savings. The public entity building owner will need to be contacted to determine if they are willing to allocate the deduction to your firm.


     3) Greenergy and your design firm enters under a contract to perform the energy analysis,           verification and certification in compliance with the 179d code. The service fee is based on a fixed     percentage of the deduction which is based on the energy savings.


     4) Design drawings, equipment specifications, occupancy information and utility rates information should be provided for the energy analysis. An energy model will be created from a combination of design drawings and information obtained during the site visit.  


     5) A site visit is required to be in compliance with 179d. The site visit takes normally less then two hours and consists of accessing mechanical rooms, rooftop units, doing a lighting         count, lumen level measurements, taking photographs of the site and equipment and discussing building systems with the building's maintenance engineer. 


     6) A certification letter is written that is a compliance with IRS 179d. The letter is signed and       stamped by a professional engineer in the state that your building is located as required by the         IRS. The certification letter is kept in your tax records and does not need to be submitted to the IRS. The deduction amount which is determined by the energy savings as calculated by the energy model is added to your tax return in the year the building become operation with the equipment. The tax return is amended with the 179d amount included on the "Other" deduction line. An allocation letter with the final deduction amount needs to be signed off by public entity. This letter is also kept for tax records. 


Contact us to find out how much 179d money your project is worth

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