Executive Summary

An 80,000-square-foot mid-size chain hotel in Texas, placed in service in 2024, achieved a full Section 179D deduction of $5.65 per square foot, resulting in approximately $450,000 in federal deductions.

The project qualified through a whole-building energy analysis incorporating lighting, HVAC, and envelope performance, supported by in-house Professional Engineer certification and delivered in just over two weeks.

Project Overview

• Building Type: Hotel

• Project Type: New Construction

• Location: Texas

• Gross Square Footage: 80,000 SF

• Placed in Service: 2024

• Delivery Method: Design-Build

• Project Leadership: Architect-led

• Owner Type: Private Developer

Technical Methodology

A whole-building energy model was developed using eQUEST, benchmarking the proposed design against an ASHRAE 90.1-2007 baseline.

All major building systems were evaluated together to assess total building energy performance.

Scope included:

• Integrated lighting analysis within the whole-building model

• Heat pump–based HVAC systems with a Dedicated Outdoor Air System (DOAS)

• Explicit modeling of the building envelope

This approach provided a robust, defensible path to qualification while maintaining audit-ready documentation.

Efficiency Measures Evaluated

Lighting

• LED fixtures throughout the building

• Occupancy sensors reducing lighting energy use

HVAC

• Efficient heat pump systems

• DOAS providing ventilation efficiency and control

Building Envelope

• Typical insulation assemblies consistent with code requirements

Results & Deduction Outcome

• Deduction Achieved: $5.65 / SF

• Total Deduction: ~$450,000

• Deduction Type: Full building

• Systems Used: HVAC, lighting, and envelope

• Model Iterations Required: None

The project met the required energy reduction threshold on the initial modeling pass.

PE Certification & Documentation

• Certification: In-house Professional Engineer

• Scope of Review:

  • Energy model validation

  • Site visit

  • Final certification review

All documentation was prepared to support tax filing and potential audit review.

Key Takeaways

• LED lighting can materially influence Section 179D outcomes, even in buildings with efficient HVAC systems.

• Whole-building modeling offers flexibility when multiple systems contribute to energy savings.

• Increasing roof insulation levels could have provided additional margin.

• Engaged owners and CPAs enable accelerated delivery — this study was completed in just over two weeks.