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Lighting Contractors: Leverage a Valuable Tax Incentive

The savings for lighting retrofits extend beyond reduced utility bills. The Tax Analytics Group (TAG) can help you leverage the Energy Efficient Commercial Building Deduction, a valuable Federal tax incentive that encourages energy efficiency in buildings. This incentive improves the return on investment for lighting projects, making your value proposition more attractive to your clients. Even better, a special rule for public buildings allows you to take this valuable incentive for yourself.

How it Works

As part of the Energy Policy Act of 2005 (EPAct) and codified under §179D of the Internal Revenue Code, commercial building owners may be eligible for an additional Federal tax deduction of $.60 per square foot of floor space for upgrading interior lighting systems. The tax deduction can increase to $1.20 or $1.80 if the building’s HVAC systems and/or building envelope are also upgraded. To qualify for the tax incentive, energy and power costs must be reduced by set percentages when compared to a reference building and are often met with current design techniques.


The cash benefits for installing energy efficient lights in a 100,000 square foot commercial facility are worth approximately $18,500. Please try our benefits calculator to estimate the tax savings for your project. To learn more about tax incentives for energy efficiency, please click here.


Special Rule for Public Projects...Free Money

A special rule allows a governmental entity to assign the deduction to the person primarily responsible for designing the property, which may include an architect, engineer or contractor. Thus, community centers, public education facilities, parking garages, and other municipal buildings that your firm has designed and constructed may qualify for the deduction. 


A 100,000 square foot lighting retrofit is typically worth $21,000 in Federal tax incentives. The tax deduction normally given to the building owner can be reassigned  directly to you, in other words, this is cash straight into your pocket.

How We Can Help

We offer turnkey solutions to lighting contractors, which include:


  Perform free assessments to pre-qualify the project.
  Calculate the value of the tax incentive.
  Prepare marketing materials and the certification packages branded under your firm’s name and logo.
  Coordinate with tax professionals to fully understand and properly record the tax incentive.
  Assist with assigning the tax incentive from the government agency to you for public projects.


Please contact us to learn how we can generate more business for you or reduce your taxes.


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