2025 Guide to Tax Credits for Energy-Efficient in Construction
- Temira Kaser
- Apr 3
- 2 min read
Section 179D – Commercial Buildings Energy-Efficiency Tax Deduction
The Section 179D deduction, now a permanent fixture, offers substantial tax benefits for architects, engineers, and construction firms that implement energy-efficient designs and constructions. To qualify, these corporations must adhere to specific contractual and timing criteria.
This deduction serves as a robust incentive for sustainable building practices, awarding up to $1.80 per square foot for comprehensive energy upgrades, or $0.60 per square foot for improvements in lighting, HVAC, or the building envelope. Such measures align with the Energy Policy Act (EPAct) requirements, driving significant cost savings and encouraging eco-friendly construction.
Section 45L – Energy-Efficient Home Credit
This credit, originating from the Emergency Economic Stabilization Act of 2008, offers developers $2,000 per dwelling unit for constructing energy-efficient residential buildings. Eligible units must surpass the heating and cooling specifications set by the 2004 energy standards. Considering the advancements in energy regulations over recent years, many new constructions might already meet these criteria, providing a ripe opportunity for developers to claim this lucrative credit.
Section 48 – Energy Tax Credit and Grants
The Section 48 Energy Tax Credit continues to foster investments in renewable energy by offering a 30% tax credit for solar energy investments and a 10% credit for qualifying energy-efficient equipment installations. This credit is pivotal for businesses aiming to enhance their energy efficiency without direct reliance on tax credits, with options to receive federal grants as alternatives.
These incentives not only support environmental sustainability but also bolster economic returns by minimizing construction and operational costs.
For further information and detailed guidance on claiming these benefits, please refer to the official Department of Energy resources:
Stay informed and maximize your investment by leveraging these 2025 tax incentives to foster more sustainable and economically viable building projects
