Commercial, multifamily (four stories or more) and industrial projects completed in recent years.
Energy solutions & §179D
Lower the bill.
Claim the deduction.
Energy strategy has two halves. Engineering review finds the measures that cut operating cost. Tax review turns qualifying improvements into deductions and credits.
How it works.
Section 179D allows a deduction for energy-efficient commercial building property: interior lighting, HVAC and hot water, and the building envelope. The deduction is per square foot and scales with the modeled energy savings against a reference standard. For projects meeting prevailing wage and apprenticeship requirements the rate is substantially higher.
Designers of government and tax-exempt buildings (architects, engineers, design-build contractors) may be allocated the deduction because the owner cannot use it. Owners of commercial buildings claim it directly. Since 2023 the deduction can also be claimed again on the same building after a qualifying retrofit.
The energy savings must be certified by a qualified individual using approved modeling software, and the paperwork needs to be in place before the deduction goes on a return. We coordinate the engineering, the certification and the tax reporting so nothing falls between the two.
Who it fits
LED conversions, controls, high-efficiency equipment, roofing and glazing.
Design firms working on schools, municipal buildings, hospitals and other tax-exempt owners.
RV parks, hospitality, cold storage and manufacturing where energy is a top operating line.
What the engagement looks like.
- 01Utility and systems review
Benchmark consumption, identify the systems driving cost and the measures worth pursuing.
- 02Eligibility screen
Confirm building type, placed-in-service dates, square footage and wage requirements.
- 03Energy modeling and certification
A qualified third party models the building and issues the certification the deduction requires.
- 04Tax delivery
Schedules, allocation letters where needed, and coordination with your CPA for the return.
Innovate Real Estate Tax Strategies does not provide legal advice. Final tax positions should be evaluated with your independent tax advisor.
Common questions
Before you start.
Every engagement begins with a free review of your facts. These are the questions we hear most.
How much is the §179D deduction?
It is calculated per square foot and depends on the percentage of energy savings and whether prevailing wage requirements are met. The amounts are indexed each year; the review quantifies your specific project.
Can I claim it for a building completed a few years ago?
Possibly, through an accounting method change for owners. Designers allocated the deduction generally amend the year of the project. We confirm the route with your CPA.
Does an energy audit commit me to improvements?
No. The review identifies options and their payback. You decide what to pursue.
Reviewed October 23, 2026. References: IRS: Energy efficient commercial buildings deduction (§179D), U.S. Department of Energy: 179D tax deduction resources. Educational overview; individual facts determine treatment.
Start with the property