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Starting in 2023, the base deduction rate starts at 50 cents/SF for 25% improvement against a baseline model and increases incrementally up to $1/SF for 50% improvement. A bonus deduction is available for projects meeting prevailing wage and apprenticeship requirements. This bonus deduction starts at 2.50/SF and increases 10 cents for each percentage improvement up to $5/SF.
The IRA modifies the previous lifetime limit on using the 179D deduction to instead a three-year cap, meaning a building can be eligible for the 179D deduction every three years assuming at least one of the systems contributing to energy efficiency has been properly renovated.
This deduction is now applicable to real estate investment trusts, and still applies to private building owners along with certain tax-exempt entities who can allocate the deduction to the “designers” (generally architects, engineers, and contractors who are primarily responsible for designing the property).
Prevailing Wage Requirements to Maximize the §179D Deduction for 2023 Projects and Onward
Projects started prior to January 30, 2023, do not need to meet prevailing wage rates to qualify for the $2.50 to $5.00 higher tier of §179D Deductions.
Any construction or installation started on or after January 30, 2023, must meet prevailing wage rates to qualify for the $2.50 to $5.00 tier of deductions.
Public Organizations, such as:
K-12 Schools, higher education, and libraries.
Municipal buildings (police, fire stations, courthouses, and more).
Public offices, and parking garages, airport terminals.
Other Tax-Exempt Entities, such as:
Charitable organizations.
Religious institutions.
Private schools and colleges.
Non-profit hospitals.
Private museums.
Tribal governments.
Any other organization falling under §501(c).
Green Tech will audit your building, begin energy modeling through the Energy Star Benchmarking system EUI service, and provide the engineering to verify the modeling.Green Tech has several moderately priced solutions to reduce usage and hit the max bonus of $5.00 per square foot. Cost to Benefit ratio for this 179D program is exceptional. We have engineering partners available, accounting firms, and the experience to model, design and implement this over and over again in any buildings your group owns or manages.
Adding storage solutions to your building is a fantastic investment that will provide immediate savings and long-term benefits. The cost of generated solar plus storage power is lower than what utilities charge, and there are many options available to meet your needs. Show your commitment to green energy and reduce your carbon footprint, all while taking advantage of federal incentives for solar and battery storage. Make the switch to ESS and commercial solar power today and start saving money and contributing to a sustainable future.
Green Tech Facilities offers state-of-the-art power boosters designed to enable ultra-fast charging for electric vehicles in locations with limited grid capabilities. It draws energy from the existing grid, stores it, and provides sustained bursts of energy to enable ultra-fast charging.
Our comprehensive maintenance and support plan covers all EVSE operational aspects to ensure 98% annual availability and hassle-free asset ownership. Available in 3 or 5-year terms.
Nonprofit organizations have a wealth of new incentives to help in their adoption and immediate ownership of clean energy solutions, including solar arrays and energy-efficiency updates to LED Lighting and HVAC systems. We’re going to focus on solar since the incentives are incredibly motivating!
IRA MAKES ITC CREDIT AVAILABLE AS DIRECT PAYMENT TO NONPROFITS
As noted in a previous blog post, “Building Owner Benefits of the Inflation Reduction Act,” nonprofits and the public sector can now receive Investment Tax Credits (ITC) as a one-time direct payment from the U.S Department of Treasury. Note: The Treasury Department has yet to publish official guidelines, expected within Q1 2023..
Green Tech Facilities is a GoGreen California ally, and GTF works with all On-Bill Financing programs available in California.
We can start helping immediately qualifying your business for the 2023 enhanced 179D deductions. Up to $5.00 per square foot of deductions is possible.
