The 179D Commercial Buildings Energy Efficiency Tax Deduction rewards building owners and designers who invest in energy-efficient systems. With recent Inflation Reduction Act enhancements, the deduction has never been more valuable.
Section 179D of the Internal Revenue Code provides a tax deduction for commercial building owners and designers who install energy-efficient lighting, HVAC, or building envelope systems. The Inflation Reduction Act (2022) dramatically expanded 179D — increasing the maximum deduction from $1.80/sqft to $5.00/sqft, making it available for building retrofits and expansions, and creating a bonus for prevailing wage compliance. Innovate Real Estate provides full 179D certification studies backed by qualified engineers and energy modelers.
Our process is thorough, IRS-compliant, and built around your schedule.
We audit your building's lighting, HVAC, and envelope systems to assess 179D eligibility.
Qualified engineers run energy models comparing your building's performance against the ASHRAE baseline — the standard required by the IRS.
A qualified engineer certifies the deduction amount and prepares the required IRS certification report.
We coordinate with your CPA to apply the deduction correctly, maximizing the dollar amount and year of recognition.
What you gain by working with Innovate Real Estate on energy optimization.
The post-IRA maximum is $5.00/sqft for qualifying systems — up from the previous $1.80 cap.
Claim deductions for systems installed in prior open tax years.
Architects, engineers, and contractors who design systems for government buildings can claim the deduction too.
Combine with cost segregation and bonus depreciation for a comprehensive deduction package.
Applies to both new construction and energy efficiency improvements to existing buildings.
Prevailing wage compliance can increase the deduction rate to the full $5/sqft maximum.
Submit your property details and we'll prepare a free estimate of your potential tax savings — no obligation.
Request Free ProposalASHRAE 90.1 is the energy efficiency standard against which the IRS measures your building. Your systems must perform better than this baseline to qualify.
Yes — for publicly owned buildings (schools, government offices, military), the deduction can be allocated to the designer rather than the owner.
The enhanced IRA rates apply to properties placed in service after 12/31/2022. Pre-2023 properties use the prior rules.
Typically 3–5 weeks from receipt of building plans and energy system documentation.
Let our team analyze your property and show you exactly how much you could be saving.