The super popular 179D tax deductions for energy efficiency upgrades in commercial buildings were first created in 2006. In 2021, the Consolidated Appropriations Act enshrined the tax deductions into the Internal Revenue Service (IRS) code, ostensibly making them permanent. In 2022, the Inflation Reduction Act further expanded these deductions to make it easier for facility managers to take advantage.
Over the years, facility managers have saved millions of dollars with the deductions. The availability of these deductions has also improved the justification case for energy efficiency projects like lighting, HVAC, and exterior upgrades. A better ROI on energy efficiency projects means a likelier chance for funding.
Now, though, according to an article written by the U.S. Green Building Council’s federal legislative director, Ben Evans, Trump’s election has “significantly increased the risk” that these incentives will be repealed. These deductions have had strong bi-partisan support since they were enacted, writes Evans. “Part of the problem is that even many members of Congress don’t understand the entirety of what these incentives are and how they work.”
In his month in office, Trump has taken a sledgehammer to policies and initiatives related to climate change, alternative energy, and sustainability. And there is significant concern in the building industry that these long-standing, super popular, bipartisan tax deductions will wind up on the cutting room floor, as well.
Greg Zimmerman is senior contributing editor for FacilitiesNet.com and Building Operating Management magazine.
