Meet the New IRA Tax Incentives
ITC for Renewable Energy
If you are considering a solar project with battery storage, but are concerned about the upfront cost, the new ITC delivers game-changing benefits.
Section 179D for Energy Efficiency
Revised provisions of the the Section 179D tax deduction are great news if you thought you couldn't afford that HVAC or building envelope upgrade
How the Inflation Reduction Act benefits commercial building owners
The Revised ITC
The ITC is a tax credit that allows taxpayers to reduce their income tax liability by a percentage of the cost of qualified renewable energy property placed in service during the taxable year. The ITC applies to various types of renewable energy property, such as solar panels, wind turbines, geothermal heat pumps, fuel cells, and small hydropower systems.
Before the IRA, the ITC was scheduled to phase out gradually from 26% in 2020 to 10% in 2022 for most types of renewable energy property. The IRA has changed this by extending the 30% ITC rate for the next 10 years. These changes can provide more certainty and incentive for commercial building owners to invest in renewable energy projects.
The Revised 179D Deduction
Section 179D is a tax deduction that allows taxpayers to immediately deduct the cost of energy-efficient property installed on or in a commercial building in the U.S. The deduction applies to three categories of property: lighting systems, heating, ventilation, and air conditioning (HVAC) systems, and building envelope components. The property must meet certain energy-saving criteria based on industry standards.
Before the IRA, Section 179D was limited to $1.80 per square foot of building space. The IRA has changed this by increasing the deduction amount to up to $5 per square foot, extending it for 10 years until December 31, 2031, and simplifying it for smaller projects by allowing prescriptive methods instead of performance-based methods to determine if their property meets the energy-saving criteria.
The new provisions in Section 179D can benefit commercial building owners by helping them save money on their energy bills, improve their environmental performance, enhance their comfort and safety, and increase their property value.
The new provisions in the ITC and Section 179D also make it more attractive for commercial building owners to combine renewable energy and energy efficiency projects on their buildings, as they can claim both the ITC and Section 179D for eligible property. And you can fund your projects with no upfront costs with C-PACE financing from PowerGreen Capital. Learn more.
Commercial Building Owners > Benefits | C-PACE | Tax Incentives | ITC for Renewables | 179D for Energy Efficiency
