Augmenting utility rebates, the Federal government offers a program that provides for accelerated depreciation of the installed energy efficient equipment. Yet, surprisingly, few building owners maximize two key areas—reducing operating costs and their tax obligation

Section 179D of the Internal Revenue Code allows immediate tax deductions for energy-efficient projects placed in service from January 1, 2006 through December 31, 2013. Generally, the building owner can claim the deduction. In the case of government buildings, the designer or prime contractor (architect, engineer, design/build contractor) may claim the deductions.

How Does the 179D Deduction Work? Owners of a commercial building that includes energy efficient equipment may claim a deduction equal to $1.80 per square foot. The taxpayer reduces the basis in its 39-year property equal to the deduction. A 200,000 square foot building can produce up to $360,000 in tax deductions that can be claimed in the tax year that the building is placed into service.

What are Qualified Energy Efficient Components? A building’s qualifying features typically include:

• Lighting systems and controls
• HVAC systems (heating, ventilation and air conditioning) and hot water systems
• Building envelope.

Projects do not have to be LEED certified to be eligible; however, most LEED certified facilities would have eligible components.

A building owner may qualify for a partial deduction also. For example, most lighting retrofit projects will qualify for a $0.60 per sq. ft. deduction.

How do Private Owners of Commercial Buildings Benefit? Private owners of commercial buildings constructed, remodeled or retrofitted during 2006-2013 enjoy the advantage of offsetting taxable income with the 179D deductions. Any type of building may qualify.

How do Designers of Government Buildings Benefit? Buildings owned by the government provide a unique opportunity for designers of the buildings. Architects, engineers and design/build contractors may be allocated the deduction by the governmental entity that owns the building. This provides a substantial benefit to the des

To qualify, architectural or design firms must specify energy efficient components and features in government owned buildings during the eligible period. The 179D deduction was created to encourage reduced energy usage. Because public facilities do not need tax deductions, this benefit is transferred to the designers of the building.

Why use Sustainable Energy Associates? 179D is a complex provision of the Internal Revenue Code that requires both engineering and tax knowledge. Sustainable Energy Associates has several years of experience in certifying buildings. We provide comprehensive reports that may run 40-60 pages and clearly and precisely describe how a building qualifies.

For more information call 925-989-7117, or email info@sustainableenergyassc.com.

Sustainable Energy Associates follows a comprehensive and thorough process that that ensures accurate analysis and 179D certification. Our source material includes: IRS Notice 2006-52 (June 2006), IRS Notice 2008-40 (March 2008), User’s Manual for the ANSI/ASHRAE/IESNA Standard 90.1-2007, and related documents like the National Electrical Manufacturers Association Guidance on Energy Policy Act Commercial Building’s Tax Deduction Certifications Letters, Revised June 18, 2007.

To certify a facility for the EECBT 179D deduction, SEA uses the following process:

• Pre-qualify project to determine the nature of the engagement and whether the project is eligible for a 179D Energy Efficient Commercial Building Tax Deduction.

• Request Data: Sustainable Energy Associates uses source documents, including building designs, plans, Title 24 reports, and mechanical and electric schedules.

• A qualified individual conducts a site survey and confirms that the energy     efficiency equipment type is installed and operating properly. We photograph the equipment for report documentation.

• Input relevant data into eQuest modeling software for the ASHRAE Standard 90.1-2001 “Reference Building” and the “Proposed” building (Taxpayer’s). The energy savings are taken from the ASHRAE database.

• Verification that the taxpayer’s building meets the necessary mandatory provisions of ASHRAE Standard 90.1-2001.

• Compare the “Reference/Base Building” model to the actual building to determine the efficiency of the building as compared the ASHRAE 90.1-2001 standard.

• Complete relevant ASHRAE forms.

• Prepare final report and have a professional engineer certify the report.

• Conduct an internal review of the report.

• Archive final report and all relevant work papers.

• Issue final report to client.

SEA has completed 179D verifications for a wide range of facilities, from facilities with Gold and Platinum LEED certifications to those that have completed simple lighting retrofits. Either a firm principal or a professional engineer will lead the project and do the analysis of the T-24 Report, mechanical and electrical plans or other facility documents. Since the majority of our 179D projects involve large scale and complex HVAC equipment, a senior engineer with visit the site and verify that the equipment has been installed correctly and is working properly.

We use laptop or electronic tablets to log information from the site visit. These devices can also provide instead video or audio communication between the person making a site visit and our in-house professional engineers. This communication is essential if questions about the lighting equipment arise. If we cannot solve the issue via this electronic communications, a senior engineer will make a second site visit to confirm equipment installation. However, in most cases, careful advanced planning and project preparation eliminate redundant site visits and related equipment issues.

The 179D certification process offers a rare opportunity to reduce tax obligations, while installing energy efficiency equipment. With energy efficiency upgrades, operating costs and carbon emissions are reduced leading to higher profits and greater corporate sustainability.

Sustainable Energy Associates has helped clients qualify for several million dollars in 179D deductions. Call SEA at 925-989-7117, or send an email to gcooke@sustainableenergyassc.com.

With the cost of energy trending upward, reducing operating costs by installing new energy efficient lighting, HVAC, and upgrading the building envelope is the single best way to reduce operating costs. California, with the nation’s first and largest energy efficiency program has utility sponsored rebates on efficient lighting and air conditioning units that cover 15-20% of replacement costs.

New York and New Jersey are rolling out large-scale energy efficiency programs. Some states like Oregon and Nevada are getting started with substantial rebates for lighting replacements.

Augmenting utility rebates, the Federal government offers a program that provides for accelerated depreciation of the installed energy efficient equipment.

Section 179D of the Internal Revenue Code allows immediate tax deductions for energy-efficient projects placed in service from January 1, 2006 through December 31, 2013. Generally, the building owner can claim the deduction. In the case of government buildings, the designer or prime contractor (architect, engineer, design/build contractor) may claim the deductions.

Sustainable Energy Associates is a mechanical engineering firm. We offer comprehensive services to our clients, including certification of the 179D, Energy Efficient Commercial Building Tax Deduction. Our team brings a cohesive, integrated approach to clients offering turnkey services.

Over the years, we have saved our clients over $5 million in 179D deductions. Our approach assures clients that they will receive maximum benefit with professional

How Does the 179D Deduction Work? Owners of a commercial building that includes energy efficient equipment may claim a deduction equal to $1.80 per square foot. The taxpayer reduces the basis in its 39-year property equal to the deduction. A 200,000 square foot building can produce up to $360,000 in tax deductions that can be claimed in the tax year that the building is placed into service.

What are Qualified Energy Efficient Components? A building’s qualifying features typically include:

• Lighting systems and controls
• HVAC systems (heating, ventilation and air conditioning) and hot water systems
• Building envelope

Often new construction or remodeled and retrofitted buildings that meet present building codes contain qualified components, which means that the potential to be eligible for 179D benefits is high.

Projects do not have to be LEED certified to be eligible; however, most LEED certified facilities will have eligible components.

How do Designers of Government Buildings Benefit? Buildings owned by the government provide a unique opportunity for designers of the buildings. Architects, engineers and design/build contractors may be allocated the deduction by the governmental entity that owns the building. This provides a substantial benefit to the des

To qualify, architectural or design firms must specify energy efficient components and features in government owned buildings during the eligible period. The 179D deduction was created to encourage reduced energy usage. Because public facilities do not need tax deductions, this benefit is transferred to the designers of the building.

Sustainable Energy Associates has helped numerous design builders meet these requirements. An unlimited number of buildings may qualify, so design firms with several qualifying projects may receive a substantial benefit.

Government buildings include federal, state and local projects such as:

• Schools
• Police and fire stations
• Prisons
• College and university buildings
• Airport authority facilities
• Military base facilities

How do Private Owners of Commercial Buildings Benefit? Private owners of commercial buildings constructed, remodeled or retrofitted during 2006-2013 enjoy the advantage of offsetting taxable income with the 179D deductions. Any type of building may qualify.

In addition to 179D deductions, building owners may also qualify for rebates and tax incentives for purchasing energy efficient equipment and components. Many utility companies (municipal and private) offer rebates from 20 percent to 50 percent of the cost of certain equipment. And many local and state governments offer incentives or credits on state and local taxes, and sales and use taxes.

Why use Sustainable Energy Associates? 179D is a complex provision of the Internal Revenue Code that requires both engineering and tax knowledge. Sustainable Energy Associates has several years of experience in certifying buildings. We provide comprehensive reports that may run 40-60 pages and clearly and precisely describe how a building qualifies.

For more information call 925-989-7117, or email info@sustainableenergyassc.comigner because they do not have to incur an outlay of cash to receive the deduction.

With the cost of energy trending upward, reducing operating costs by installing new energy efficient lighting, HVAC, and upgrading the building envelope is the single best way to reduce operating costs. California, with the nation’s first and largest energy efficiency program has utility sponsored rebates on efficient lighting and air conditioning units that cover 15-20% of replacement costs.

New York and New Jersey are rolling out large-scale energy efficiency programs. Some states like Oregon and Nevada are getting started with substantial rebates for lighting replacements.

Augmenting utility rebates, the Federal government offers a program that provides for accelerated depreciation of the installed energy efficient equipment.

Section 179D of the Internal Revenue Code allows immediate tax deductions for energy-efficient projects placed in service from January 1, 2006 through December 31, 2013. Generally, the building owner can claim the deduction. In the case of government buildings, the designer or prime contractor (architect, engineer, design/build contractor) may claim the deductions.

Sustainable Energy Associates is a mechanical engineering firm. We offer comprehensive services to our clients, including certification of the 179D, Energy Efficient Commercial Building Tax Deduction. Our team brings a cohesive, integrated approach to clients offering turnkey services.

Over the years, we have saved our clients over $5 million in 179D deductions. Our approach assures clients that they will receive maximum benefit with professional

How Does the 179D Deduction Work? Owners of a commercial building that includes energy efficient equipment may claim a deduction equal to $1.80 per square foot. The taxpayer reduces the basis in its 39-year property equal to the deduction. A 200,000 square foot building can produce up to $360,000 in tax deductions that can be claimed in the tax year that the building is placed into service.

What are Qualified Energy Efficient Components? A building’s qualifying features typically include:

• Lighting systems and controls
• HVAC systems (heating, ventilation and air conditioning) and hot water systems
• Building envelope

Often new construction or remodeled and retrofitted buildings that meet present building codes contain qualified components, which means that the potential to be eligible for 179D benefits is high.

Projects do not have to be LEED certified to be eligible; however, most LEED certified facilities will have eligible components.

How do Designers of Government Buildings Benefit? Buildings owned by the government provide a unique opportunity for designers of the buildings. Architects, engineers and design/build contractors may be allocated the deduction by the governmental entity that owns the building. This provides a substantial benefit to the des

To qualify, architectural or design firms must specify energy efficient components and features in government owned buildings during the eligible period. The 179D deduction was created to encourage reduced energy usage. Because public facilities do not need tax deductions, this benefit is transferred to the designers of the building.

Sustainable Energy Associates has helped numerous design builders meet these requirements. An unlimited number of buildings may qualify, so design firms with several qualifying projects may receive a substantial benefit.

Government buildings include federal, state and local projects such as:

• Schools
• Police and fire stations
• Prisons
• College and university buildings
• Airport authority facilities
• Military base facilities

How do Private Owners of Commercial Buildings Benefit? Private owners of commercial buildings constructed, remodeled or retrofitted during 2006-2013 enjoy the advantage of offsetting taxable income with the 179D deductions. Any type of building may qualify.

In addition to 179D deductions, building owners may also qualify for rebates and tax incentives for purchasing energy efficient equipment and components. Many utility companies (municipal and private) offer rebates from 20 percent to 50 percent of the cost of certain equipment. And many local and state governments offer incentives or credits on state and local taxes, and sales and use taxes.

Why use Sustainable Energy Associates? 179D is a complex provision of the Internal Revenue Code that requires both engineering and tax knowledge. Sustainable Energy Associates has several years of experience in certifying buildings. We provide comprehensive reports that may run 40-60 pages and clearly and precisely describe how a building qualifies.

For more information call 925-989-7117, or email info@sustainableenergyassc.comigner because they do not have to incur an outlay of cash to receive the deduction.

Designed to offset some of the costs of qualifying energy-efficient improvements for commercial buildings, the deduction allows taxpayers to take an immediate expense for the cost of property that would normally be recovered through depreciation over as many as 39 years.

This benefit, which is vastly misunderstood and underused by most building owners, provides a significant reduction in taxes for those who have retrofitted their buildings with energy efficiency upgrades. The deduction is equally applicable to new construction. Not widely known, the deduction can be allocated to design builders who construct facilities owned by the Federal or municipal governments or public agencies like schools, or colleges.

In general, the person, or a company eligible for the deduction is primarily responsible for designing, or creating the energy efficiency elements of a facility. This could be a general contractor, an architect, engineer, environmental consultant or energy services provider. In large projects, a several designers or companies will participate and the deduction can be allocated accordingly. The same applies for retrofit or remodeling projects, either commercial or public-agency owned.

The Energy Efficient Commercial Building Tax deduction applies to new construction as well as retrofits and remodels that include the installations of energy efficient equipment. For example, if a hotel does a complete remodel and replaces energy intensive T-12 lighting with new and efficient T-8s and LED lights.

Sustainable Energy Associates is a mechanical engineering company, and experts in certifying buildings for the 179D tax deduction. Here is a short overview that explains the Section 179D federal energy tax deduction and how it may be able to benefit your business.

Section 179D Requirements

To qualify, the energy-efficient improvements must significantly reduce the usage and the corresponding energy and power costs for the building. This reduction is via the facilities’ main systems of interior lighting, heating, cooling, ventilation (HVAC) and hot water systems, and the overall building envelope (insulation, cool roofs, etc.). Together the improvements need to result in a reduction of 50 percent of the building’s energy costs. This reduction is a modeled cost compared to a baseline—ASHRAE standard. It is not a comparison of the building’s actual energy costs.

Taken together, and overall reduction of 50 percent qualifies for the complete deduction. However, the IRS allows for partial deductions. In other words, a building can qualify for a partial deduction based only on a lighting retrofit, or only on HVAC.

To certify the deduction, an inspection of the facility is done that verifies that the energy efficient equipment was installed and is working properly. Then the building is modeled using eQuest, the Department of Energy approved software, and the certification is completed by a qualified engineer or contractor registered in the jurisdiction. For large and complex facilities, a comprehensive certification report can run 40-60 pages.

How much is the deduction?

• The IRS allows for $1.80 per square foot for a 50% reduction in total annual energy and power costs (compared to a reference building that meets the minimum requirements of ASHRAE Standard 90.1 2001); not to exceed the amount equal to the cost of the energy-efficient commercial building property placed in service during the taxable year.
• Partial deduction of $0.60 per square foot for a 25-40% reduction in lighting power density (50% in the case of warehouses).
• Partial deduction for non-conditioned spaces, like parking lots, is allowed at $0.30 per square foot.
• Partial deduction for energy efficient HVAC equipment is allowed at $0.60 per square foot.

It is common for facilities to qualify for both lighting and HVAC, which together is $1.20 per square foot.

What qualifies?

• Commercial buildings (any size).
• Apartments, four or more stories, for lease.
• Mixed use facilities that includes commercial and residential space.
• Federal, government or public-agency owned facilities.

Who qualifies?

• Building owner at the time of building improvements.
• Public buildings – the owner may allocate the deduction to the designer (engineer, contractor, architect, environmental consultant or energy services provider) for the taxable year that includes the date, which the property is placed in service.

What is the eligibility timeframe?

Units must be completed or renovated after December 31, 2005.

What do I need from the builder?

• Plans or documents that includes the upgrade equipment specifications and quantity.
• General plans that show building layout and floor plans.
• Energy compliance documents for lighting, HVAC and envelope (Title 24 or IECC)
• A contact person and phone number

What do I get from a 179D review?

• Certification report that is comprehensive, complete and ready to submit to the IRS.
• Review of existing T-24 or IECC documents to verify compliance with current code requirements.
• Review building lighting, HVAC and envelope systems for Federal Tax Deduction qualification.

How do I claim the deduction?

• In January 2011 the IRS made claiming the 179D deduction easier. Now taxpayers can use the accounting method instead of refilling their complete tax returns. This makes it much easier to claim this deduction.
• The deduction is eligible for all energy efficient improvements on property since 2006.

Buildings owners are much more conscious of energy efficiency. In many areas, local building codes are mandating that buildings be more efficient, and even large tenants are beginning to demand improvements that will reduce their operating costs. Given the growing number of incentives available to encourage incorporating energy-efficient improvements into commercial buildings, it is important to consider any federal and local tax incentives available.

Sustainable Energy Associates has helped clients qualify for several million dollars in 179D deductions. Call SEA at 925-989-7117, or send an email to gcooke@sustainableenergyassc.com.

The Energy Efficient Commercial Building Tax Deduction (IRS Code Section179D) provides a one-time accelerated depreciation for commercial and multifamily facilities that expires at the end of 2013. This benefit, which is vastly misunderstood and underused by most building owners, provides a significant reduction in taxes for those who have retrofitted their buildings with energy efficiency upgrades.

“We are helping building owners and developers that implemented energy efficiency upgrades to take advantage of a major tax deduction they deserve,” said Grant Cooke, CEO, Sustainable Energy Associates.  “Unfortunately, very few people know and understand Section 179D so we are offering our IRS-approved building modeling and professional certification services to commercial building owners throughout California.”

Commercial building owners or facility directors, who have upgraded their building’s lighting, HVAC, or building envelope can take full advantage of this tax deduction—up to $1.80 per square foot.

Energy efficiency projects that were implemented since 2006 are eligible. In a rare effort by the IRS to help tax payers, the 179D Energy Efficient Commercial Building Deduction can be filed via the accounting method, rather than a complete refilling of the year’s tax return. This makes capturing the deduction much easier.

Sustainable Energy Associates is a Northern California mechanical engineering firm. SEA has engineers who are LEED accredited and have extensive experience in energy modeling and 179D certification.

For  information call Grant Cooke @ 925-989-7117, or email gcooke@sustainableenergyassc.com.