Tax Incentives

Tax-Incentives-600x500There are numerous green construction tax incentives including rebate programs offered by state government and power companies to make choosing sustainable products and practices fiscally rewarding. Building designers, contractors and owners can easily adopt green strategies for their facilities to take advantage of green construction tax incentives. Some of the most financially rewarding state and local power company green construction tax incentives can be found at

In addition to the various state and power company green construction tax incentives, there are also federal tax deductions available through the Internal Revenue Service for commercial property owners. The federal tax deduction is for commercial property owners who bring their property up to a minimum level of energy efficiency which must be greater than the minimum requirements enacted in the 2005 Energy Policy Act. It is only for buildings that were retrofitted after December 31, 2005 and prior to January 1, 2009. To qualify for federal green construction tax incentives, the building must have reduced energy costs resulting from the building’s heating, cooling, ventilation, hot water and interior lighting by 50% from a reference building meeting the minimum requirements of ASHRAE 90.1-2001 Standard.

The amount of the federal green construction tax incentive deduction is $1.80 per square foot of conditioned area if the 50% improvement is documented. Lesser deductions are available up to $0.60 per square foot if the energy improvements reach a minimum level of 16 2/3% above the reference building mentioned above. The Department of Energy also lists acceptable computer programs that can be used to calculate and verify the energy improvement. These green construction tax incentive deductions are available for buildings or systems placed in service from January 1, 2006 through December 31, 2013.