The Inflation Reduction Act (IRA) has created a number of unique incentives for homeowners to install energy-efficiency equipment. But how does that impact business owners and the commercial contractors who serve them? Can those same home improvement credits be applied to business improvements?
Unfortunately, there isn’t a clear answer yet. The IRA did increase an existing tax credit (179D) for commercial buildings from $1.80/sq ft to $5/sq ft. That credit is based upon a certain amount of energy savings or reduction. Effectively, your credit is directly tied to your energy savings: increase your energy savings percentage, increase your credit. This is what is known as a “performance” incentive (as opposed to a “prescriptive” incentive, which simply pays a set amount of money for certain measures).
What remains unknown is how the DOE will measure the performance of projects, which further complicates how exactly (or even whether) commercial customers can take advantage of these credits. (You can read more on this in Renewable Energy Magazine.)
The GoGreen Financing team will continue to monitor for developments or any other breaking news on the subject. Stay tuned, and we’ll provide any updates as soon as they become available.
Note: While GoGreen Financing tries to share the most relevant, accurate information with you that we can, we are not tax experts. Please refer to IRS.gov and/or local regulations for specifics and a complete understanding of the Inflation Reduction Act, tax credits and other legislative details.