In effect since 2006 and extended several times since, the Section 179D energy-efficient commercial buildings deduction is at a crossroads after expiring at the end of 2016. The law, which provides a deduction of up to $1.80 per square foot for commercial and multifamily buildings that exceed specific energy-efficiency requirements (including for HVAC systems), had previously provided an added financial incentive for building owners to boost their efficiency. Writing in HPAC Engineering, energy and sustainability consultant Larry Clark says the future of the law is uncertain.
“The House Republican Blueprint for Tax Reform contains no reference to §179D,” he writes. “It does, however, mention the repeal of unspecified ‘special-interest credits and deductions.’ This is consistent with House Republicans’ theme of not allowing government to pick ‘winners’ and ‘losers.'” Several bills created in the previous Congress would repeal, replace, or expand the law, muddying the issue further.
For now, it appears building owners should weigh the ROI of efficiency improvements on their own merits, without the benefit of added incentives. Check out our commercial applications page for inspiration for your specific building type.