DOE launches tools to estimate tax deductions for energy-efficient technologies

The U.S. Department of Energy (DOE) has launched the free 179D Portal for estimating tax deductions for energy-efficient technologies in commercial buildings.

The portal hosts the Traditional (Modeling) Pathway tool and Alternative (Measurement) Pathway tool that both help estimate potential federal tax deductions for qualifying upgrades beginning in tax year 2023. The Inflation Reduction Act of 2022 revised the 179D deduction to enable two different pathways for compliance: the traditional pathway based on modeled savings beyond a reference building code, and an alternative pathway for buildings reducing their energy use based on utility data from previous levels.

The alternative compliance pathway tool can estimate potential deductions for all commercial building types using equipment information and pre- and post-retrofit utility data through the U.S. Environmental Protection Agency’s ENERGY STAR Portfolio Manager platform. The traditional pathway tool estimates potential 179D deductions for small office buildings and retail strip malls with common building characteristics by calculating the simulated energy cost savings.

DOE intends to add additional building types for the traditional pathway. “The 179D Portal will help building owners identify which combination of energy-efficient technologies can impact the bottom line in a commercial building upgrade or new construction project,” said Michael Furze, director of DOE’s Building Technologies Office.