Tax Incentives

When you take a look at the true cost of reducing energy usage, it sometimes can be hard to justify the expense involved. Fortunately, there’s a tax incentive program available which makes it much more attractive to make your commercial property energy-efficient. Many property owners (and even leaseholders) are already taking advantage of section 179D energy efficiency incentives. Here’s why:

Section 179D: What Is It, How Does It Work?

Section 179D is an under-appreciated, but very effective program that provides major tax incentives for property owners or leaseholders who take steps to make their buildings more energy-efficient. The available deductions are quite significant: up to a maximum of $1.80 per square foot. This incentive adds up quickly. For example, a successful retrofit of a 100,000 square foot commercial building earns a $180,000 tax deduction.

The rules governing the incentive program are quite reasonable. They’re performance-based. How you reduce your energy use doesn’t matter as long as you achieve results. The deductions are even available to designers (architects, engineers, and design-build firms) working on municipal projects. For retrofitting existing buildings, a reduction in energy usage of 50% is required to earn the full deduction.

Scoring These Tax Incentives

As you might expect of a government program, successfully receiving these incentives does require certain criteria to be met and verifications to be made. The reduction in energy usage has to be verified by an independent energy analysis. Section 179D incentives only apply to facilities that are at least 35,000 square feet or larger. The deductions are broken down into three separate categories: HVAC, lighting, and building envelope.

There is great news, though! You can claim partial credits for energy reductions in any one of these three areas. Improving the energy efficiency of your building envelope, for example, may not be practical. These tax incentives are well worth applying for. You can still get a smaller deduction for a partial reduction in energy consumption for lighting.

How Wholesale Lighting Can Help

For business owners and property managers, lighting is often a huge part of a building’s energy consumption. A few relatively simple changes can dramatically reduce a business’s energy bill and make it eligible for Section 179D incentives. It might take no more than switching to high-efficiency fluorescent and LED lights in places where you’re currently using older, conventional lighting.

If your property requires more extensive modifications to become truly energy efficient, Wholesale Lighting is still there to lend a hand. Whether you need an advanced control system to power down lights when they are not needed, or an entirely overhauled lighting plan to achieve better results with fewer Watts, we can help you meet your goals.

Now that you have an understanding of the incentives available, you can see that being energy efficient often makes financial sense as well as environmental sense. If you’re ready to start your commercial property on the way to energy efficiency (and a very useful tax deduction!) don’t hesitate to give Wholesale Lighting a call.