When the Energy Policy Act of 2005 (also known as the 179D Commercial Building Tax Deduction) was extended another year in December 2014 it only applied to projects installed during the year 2014. While projects completed after 12/31/14 are not eligible for the most recent extension, we are confident that Congress will reconvene at some point this year to discuss different options for extending EPAct to 2015 projects and beyond.
We see three likely outcomes:
1. Extend the tax incentive another year using the same requirements (ASHRAE/IESNA 90.1 (2001) limits) and the same tax deduction rate (up to $.60 per square foot for lighting projects)
2. Rewrite the bill entirely and change the requirements to something more recent than the 2001 ASHRAE limits and also potentially increase or decrease the tax deduction rate
3. Allow the bill to lapse and eliminate this tax deduction altogether
If we were to pick the most likely outcome from the above list, it's option 2. Given this bill has been extended "as is" for the last three years and there is great interest and participation, we think Congress will find value in this tax deduction going forward. In order to push something through they will likely determine that the requirements and the tax deduction rate are in need of updates.
We will continue to monitor this bill as it evolves throughout the year. We will share any changes or extensions as they arise.
Katie Quam is Energy Management Collaborative's Manager of Customer Incentives. In this role she utilizes her knowledge of incentive programs nationwide to expedite the application process and secure maximum incentive dollars for EMC customers.