Dear LightingTaxDeduction.org,

What is the Energy Efficient Commercial Buildings Deduction?

Answer: The Energy Efficient Commercial Buildings Deduction is Section 1331 of the Energy Policy Act of 2005. The Commercial Buildings Deduction, advocated by the National Electrical Manufacturers Association (NEMA) and the Natural Resources Defense Council (NRDC), is a special financial incentive for building owners to adopt the most energy-efficient lighting strategies.

The Deduction provides up to the entire cost of energy-efficient interior lighting to be deducted on the owner’s taxes in the year the lighting is placed in service, capped at $0.60/sq.ft., if the new lighting’s power use reduces lighting power density below the maximum allowable lighting power densities listed in ASHRAE/IES Standard 90.1-2001, and if other requirements are met.

Alternatively, a building could achieve a target level of savings for HVAC/hot water and building envelope in addition to lighting, and benefit from deducting the entire cost of all energy-saving upgrades capped at $1.80/sq.ft.

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