Commercial Green Building News and Analysis!

Section 1331: Green Building Tax Deduction?

Question:


I heard about tax credits that are available for making energy efficiency investments in my office building... is this true?

Answer:


There is a tax deduction available (it is not a tax credit or a tax rebate) as part of The Energy Policy Act of 2005 (Public Law 109-58) which allows commercial building owners to deduct the cost of greening an existing building to make it more energy efficient. This was conceived as a way to make it more cost-effective to conserve energy (high fuel prices have made such investments even more cost effective) and it is available to building owners through the end of 2008 (it is set to expire on January 1, 2009 and I do not know if Congress will renew this deduction as part of other energy efficiency packages currently being considered).

Because of the deduction, it is a very smart investment to make now. Section 1331 applies to energy efficient investments in lighting, HVAC (mechanical plant), hot water, energy management systems and building envelope. The investments should result in a reduction of energy of 50% as compared to a comparable building in your area as defined by ASHRAE Standard 90.1-2001.

Comments

50% energy reduction is often

Mon, 09/29/2008 - 11:42 — Will (not verified)

50% energy reduction is often difficult to attain... A partial deduction may be/is available if significant energy savings but below 50% are achieved and measured by a reputable 3rd party energy efficiency consultant or commissioning agent.

Energy Efficient Commercial Building Tax Deduction

Wed, 10/08/2008 - 12:57 — Doug Morrell (not verified)

A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems. These tax deductions are available for systems “placed in service” from January 1, 2006 through December 31, 2013.

Energy Efficient Commercial Building Tax Deduction:
To learn more about the Energy Efficient Commercial Building Tax Deduction, you can visit: http://www.SourceCorpTax.Com

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