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Section 179D

Section 179D, known as the Energy Efficient Commercial Buildings Deduction, allows property owners and designers to claim a federal tax deduction for installing energy-saving systems, with 2026 rates ranging from a base of $0.59 to $1.19 per square foot up to a "bonus" rate of $2.97 to $5.94 per square foot if prevailing wage and apprenticeship requirements are met.

Investment Tax Credits

The Investment Tax Credit (ITC), now transitioning to the tech-neutral Clean Electricity Investment Credit (Section 48E) for projects starting in 2025, provides a federal tax credit for a percentage of the total cost of installing renewable energy systems, with a 2026 base rate of 6% that jumps to 30% if prevailing wage and apprenticeship requirements are met.

Cost Segregation

A Cost Segregation Study is an engineering-based analysis that accelerates tax deductions by reclassifying portions of a building’s 39-year structural cost into shorter 5, 7, or 15-year recovery periods, typically yielding an immediate first-year tax benefit of 15-30% of the reclassified assets, utilizing the restored 100% bonus depreciation.