Energy Incentives
The energy-efficient commercial buildings deduction and the new energy-efficient home credit — certification requirements, prevailing-wage multipliers, allocation to designers, and post-2025 phase-outs.
Start here
2 piecesNo background assumed — the pieces that build the foundation.
Brief · Intro · 3 min
How homes get certified for the 45L credit
The Section 45L credit requires actual ENERGY STAR or Zero Energy Ready Home certification by an accredited rater — engaged during construction, with framing-stage and final inspections, sampling protocols for multifamily, and a documentation file per home.
Brief · Intro · 4 min
Why the energy modeling software behind a 179D claim matters
Section 179D savings must be modeled in software on the Department of Energy's qualified list, against the applicable ASHRAE 90.1 baseline. A claim modeled in unqualified software fails regardless of how efficient the building is — and a modeling report should let a reviewer re-perform the result.
The working layer
12 piecesThe practitioner's day-to-day rules, mechanics, and traps.
Guide · Working · 6 min
Energy incentives after OBBBA: what is dead, what survives, and what is still claimable
The One Big Beautiful Bill Act ended Section 179D for construction beginning after June 30, 2026 and Section 45L for homes acquired after that date. Projects already in flight still qualify, and prior-year claims remain open — via Form 3115 for owners and amended returns for designers and builders.
Guide · Working · 7 min
Claiming the Section 179D deduction, start to finish
A 179D claim runs from feasibility screen through energy modeling, site inspection, certification, and — for designers — an allocation letter, before landing on Form 7205. Here is each step, who performs it, how long it takes, and what survives an exam.
Guide · Working · 7 min
The Section 179D designer allocation: how architects and engineers claim a building they don't own
Governments and, since 2023, all tax-exempt building owners can allocate the Section 179D deduction to the building's designer. Here is who counts as a designer, how allocation letters work, and where the IRS pushes back.
Guide · Working · 8 min
Section 179D explained: the energy-efficient commercial buildings deduction
Section 179D allows up to $5-plus per square foot (indexed) for energy-efficient commercial building property, with a prevailing-wage multiplier — but it terminates for construction beginning after June 30, 2026. Here is how the deduction actually works.
Brief · Working · 4 min
After June 30, 2026: what the 179D and 45L terminations actually cut off
Section 179D ends for construction beginning after June 30, 2026; Section 45L ends for homes acquired after that date. What those triggers mean, which safe harbors apply, and what work remains for projects in flight and prior years.
Brief · Working · 4 min
What a defensible 179D or 45L certification actually requires
Energy incentive claims survive or die on the certification file: DOE-listed modeling software, a real site visit, a properly credentialed certifier, and the right baseline. Here is the checklist — and the red flags in cheap studies.
Brief · Working · 4 min
179D allocations from tax-exempt building owners
Since 2023, any tax-exempt building owner — nonprofits, churches, tribal governments, not just government entities — can allocate the Section 179D deduction to the building's designer. The letter must come from an authorized representative and state the allocation amount; disputes cluster around authority and competing designers.
Brief · Working · 3 min
Section 179D or Section 45L: which incentive fits which building
179D is a per-square-foot deduction for commercial and high-rise buildings; 45L is a per-unit credit for homes and low-rise multifamily. A comparison of who claims what, how much, and under which certification path.
Brief · Working · 3 min
Form 7205, line by line
Form 7205 computes the Section 179D deduction: building identification, square footage, energy savings percentage, the per-square-foot amount with or without prevailing wage compliance, and separate treatment for owners and allocated designers.
Brief · Working · 3 min
Section 45L for multifamily: amounts, paths, and who claims
Multifamily units earn a 45L credit of $500 (ENERGY STAR) or $1,000 (Zero Energy Ready) per unit at base rates — rising to $2,500 or $5,000 with prevailing wage compliance. The developer with an ownership interest during construction claims it, not the fee builder.
Brief · Working · 3 min
Prevailing wage and apprenticeship rules: the five-times multiplier, briefly
The IRA's prevailing wage and apprenticeship (PWA) requirements multiply the Section 179D deduction by five and lift multifamily 45L credits. Here is what compliance, correction, and the penalty mechanics actually require.
Brief · Working · 3 min
The Section 45L new energy-efficient home credit, briefly
Section 45L gives eligible contractors a credit of $2,500 per ENERGY STAR home or $5,000 per Zero Energy Ready home — with lower multifamily amounts restored by prevailing wage compliance. It terminates for homes acquired after June 30, 2026.
Pro details
1 piecesSpecialist nuance: edge cases, interactions, and planning.