Featured Projects

Explore our Featured Projects, highlighting successful implementations of energy tax incentives such as 179D deductions, 45L credits, cost segregation studies, and investment tax credits (ITC). Discover real-world examples from various industries that demonstrate how strategic energy-efficient upgrades can reduce costs, maximize ROI, and enhance financial performance.
New York, NY

NYC Multi-Family Renovation Delivers Energy Efficiency Upgrades eligible for $4 per square foot in federal incentives

A multi-family building in New York City underwent a $30 million renovation focused on enhancing the building envelope to improve energy efficiency and sustainability. The project included upgrades to insulation, windows, and exterior materials, reducing heat loss and optimizing the building’s overall performance.

Austin, TX

Multi-Family Construction in Texas Yields 179D, 45L, and Cost Segregation Incentives

A newly constructed 245,000-square-foot multifamily development in Austin, TX, was completed in July 2023 with a total project cost of $40.5 million. The property consists of 183 residential units, incorporating energy-efficient features and solar energy systems to enhance sustainability.

Oakland, MI

Michigan LED Designer Claimed Over $1.2M for a Hospital Lighting Retrofit

A hospital renovation in Oakland, MI, was completed in September 2023 with a total project cost of $1.5 million. As part of the renovation, the hospital upgraded its lighting system to new energy-efficient LED fixtures, improving energy performance and reducing long-term operational costs. Since the hospital is a nonprofit entity and unable to directly claim tax incentives, the LED designer responsible for the project was allocated the 179D deduction, allowing them to benefit from the energy efficiency improvements.

Sedgwick, KS

Kansas Government Entity Expansion Yields $504K in 179D Deductions for Architect

A 169,000-square-foot addition and renovation of a K-12 public school in Sedgwick, KS, was completed in January 2024 as part of an effort to modernize and expand the school’s infrastructure. The project incorporated energy-efficient upgrades to the lighting, HVAC, and building envelope to enhance sustainability and reduce long-term energy costs for the school district.

Andover, KS

Kansas Engineering Firm Secures $77K in 179D Deductions for Municipal Fire Station with IRA Benefits

A new 16,000-square-foot municipal fire station in Andover, KS, was designed with energy efficiency at the forefront, incorporating high-performance HVAC, lighting, and building envelope solutions to reduce long-term operating costs. The engineering firm responsible for the project played a pivotal role in ensuring the station exceeded energy efficiency benchmarks, ultimately qualifying for the Section 179D deduction, expanded under the Inflation Reduction Act (IRA).

Lafayette, IN

Indiana Auto Dealership Secures 179D Incentives for New Construction

A 40,000-square-foot auto dealership in Lafayette, IN, was newly constructed and completed in August 2024, with a total project cost of $8.2 million. By incorporating energy-efficient design elements from the start, the dealership qualified for Section 179D, securing valuable tax deductions that improved cash flow and accelerated return on investment. These upgrades not only reduced long-term energy costs but also positioned the dealership as a more sustainable and cost-efficient operation.

LaGrange, IL

Illinois Medical Nonprofit’s Lighting Upgrade Secures $360K in 179D Deductions for LED Designer Under the IRA

A 600,000-square-foot medical nonprofit in Illinois recently completed a $360,000 lighting system upgrade, replacing outdated fixtures with a modern, energy-efficient LED design. The improvements not only enhanced energy performance and cost savings for the hospital but also triggered eligibility for the Section 179D deduction, expanded under the Inflation Reduction Act (IRA).

Houston, TX

Houston Property Management Group Secures $136K in 179D Deductions for HVAC Renovation

A Houston-based property management group recently completed an HVAC renovation for one of its office properties, investing $185,000 to upgrade its heating, ventilation, and air conditioning systems. By enhancing energy efficiency through modernized HVAC technology, the company not only reduced operational costs but also qualified for the Section 179D deduction, designed to reward energy-saving improvements in commercial buildings.

Fort Collins, CO

Colorado High School HVAC Renovation Earns $181K in 179D Deductions for Engineering Firm

A 288,000-square-foot high school in Fort Collins, CO, recently completed an HVAC renovation aimed at improving energy efficiency and reducing operational costs. By upgrading to a modern, high-performance heating, ventilation, and air conditioning system, the school achieved a 27% reduction in energy consumption compared to the ASHRAE 90.1 standard, resulting in significant cost savings and sustainability benefits for the district.

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Frequently Asked Questions

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What is the 179D tax deduction for energy-efficient buildings?

The Section 179D tax deduction is a federal incentive that allows building owners and certain designers to deduct the cost of qualifying energy-efficient improvements made to commercial or government buildings. It offers up to $5.81 per square foot for improvements to HVAC, lighting, or the building envelope that meet required energy savings thresholds.

This deduction is available in all 50 states and has been widely used by building owners, architects, and engineers working on projects ranging from public schools and office buildings to warehouses and multifamily developments. Whether your project is in New York, Texas, California, or anywhere else in the U.S., 179D can offer significant tax savings for energy-efficient construction or retrofits.

Who qualifies for the 179D deduction in 2025?

In 2025, two main groups may qualify for the 179D deduction: (1) commercial building owners who invest in energy-efficient upgrades, and (2) designers—such as architects, engineers, and contractors—who work on qualifying energy systems in government-owned buildings.

The deduction is available nationwide, and eligibility does not depend on the building’s location but rather on the nature of the project and the improvements installed. Whether you're developing a private warehouse in Arizona or designing a government facility in Illinois, you may be eligible to claim the deduction if the project meets the energy efficiency standards set by the IRS and Department of Energy.

How much is the 179D deduction per square foot in 2025?

As of 2025, the 179D deduction ranges from $0.58 to $1.16 per square foot without prevailing wage and apprenticeship compliance, and up to $2.69 to $5.81 per square foot if those labor standards are met. The exact amount depends on the level of energy savings achieved compared to ASHRAE benchmarks and whether the project meets labor compliance thresholds outlined in the Inflation Reduction Act.
These rates apply uniformly across all U.S. jurisdictions, offering substantial incentives for commercial energy-efficient upgrades. For example, a 100,000-square-foot facility with qualifying systems could generate between $58,000 and $581,000 in deductions—whether located in Florida, Ohio, Oregon, or anywhere else in the country.

The Inflation Reduction Act (IRA) introduced several significant updates to key tax incentives, including the Investment Tax Credit (ITC), Section 179D for energy-efficient commercial buildings, Section 30C for alternative fuel vehicle refueling property, and Section 45L for residential energy-efficient property.

What are the prevailing wage and apprenticeship (PWA) requirements for 179D?

Prevailing wage and apprenticeship (PWA) requirements are not mandatory to claim the 179D deduction, but they do significantly increase the available benefit. Under the Inflation Reduction Act, projects that meet these labor standards can qualify for the full deduction of up to $5.81 per square foot in 2025.

If these requirements are not met, the deduction is still available, just at a lower rate, ranging from $0.58 to $1.16 per square foot, depending on energy savings achieved. This allows many projects across the U.S. from office retrofits to warehouse builds—to still benefit meaningfully, even without full labor compliance.

Can architects, engineers, and contractors claim 179D on government projects?

Yes. Architects, engineers, and other design professionals who contribute to energy-efficient systems in government-owned buildings (such as schools, courthouses, and municipal facilities) can claim the 179D deduction if they receive a formal allocation letter from the government entity.

This benefit applies nationwide and is particularly valuable for firms that routinely work on public-sector projects. Whether you’re based in Washington state or working on federal projects in Washington, D.C., claiming 179D can help recover costs and improve cash flow—especially for firms participating in state or city green building initiatives.

What is an allocation letter for the 179D deduction?

An allocation letter is a signed document from a government agency that transfers the 179D deduction to the qualifying designer of a public building project. This typically includes architects, engineers, energy consultants, or design-build contractors responsible for the energy systems.

To claim the deduction, the designer must obtain the letter from the government entity that owns the building, confirming their role in designing the qualifying energy-efficient features. This process is standardized across the U.S., whether the project is a public school in Pennsylvania or a state courthouse in Nevada. The letter is a key compliance document and must be retained for IRS documentation.

What does a 179D energy study involve?

A 179D study is a technical report that verifies the energy efficiency of a building’s systems to determine eligibility for the deduction. It includes computer-based energy modeling, a site visit to confirm installation, and final certification by a qualified third-party professional (such as a licensed engineer).

The study compares the building’s performance against a baseline standard set by ASHRAE, typically using tools like eQUEST or EnergyPlus. This process is required regardless of the project’s location—whether you're upgrading a hospital in Michigan or constructing a government facility in Utah.

Can I claim both 179D and Cost Segregation on the same building?

Yes, 179D and Cost Segregation can both be claimed on the same property, as they apply to different parts of the tax code. 179D covers energy-efficient systems like lighting, HVAC, and insulation, while Cost Segregation accelerates depreciation for specific components such as flooring, cabinetry, or specialty electrical systems.

This combination is commonly used nationwide by commercial real estate owners looking to reduce tax liability and improve cash flow. Whether you own a medical office in Arizona or a logistics center in Indiana, these strategies can work together to maximize your benefit—just be sure to coordinate with your tax advisor to avoid overlap in deductions.

Does 179D apply to multifamily buildings?

Yes, multifamily buildings may qualify for the 179D deduction if they are four stories or more above grade and are considered commercial under the IRS guidelines. These buildings must include eligible energy-saving systems and meet specific energy reduction targets compared to a baseline standard.

Multifamily developers across the U.S.—from high-rise apartments in Chicago to mixed-use buildings in Atlanta—can benefit from 179D, particularly for projects incorporating efficient HVAC, envelope insulation, or LED lighting. Lower-rise residential projects, however, may instead be eligible for the 45L tax credit.

Can TaxTaker help with the 179D deduction?

Yes! TaxTaker specializes in helping building owners, designers, and developers claim the 179D deduction. We provide free estimates, manage the entire energy study and allocation process, and work directly with your CPA or tax team to ensure full compliance.

Our team has helped clients across the country—from New York to California—maximize their savings through strategic use of 179D, often in combination with other incentives like the 45L tax credit and cost segregation studies. Whether you're working on a new build or a retrofit, we’ll help you uncover the full value of your energy-efficient upgrades.

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