Businesses can take a tax deduction for new or renovated buildings by reducing the energy costs associated with three components – lighting system, building envelope, and heating, cooling and water-heating equipment. Building must meet the ASHRAE 90.1-2001 standard and be placed in service between January 1, 2006 and December 31, 2013 in order to be eligible. The deduction is available in two levels:

• Buildings that save 50% or more of projected annual energy costs across all three system components are eligible for a tax deduction of $1.80 per square foot.
• Buildings that save a percentage of projected annual energy costs for one of the three components – building envelope (10% energy savings), lighting (20%), and heating & cooling (20%) – are eligible for a partial deduction of $0.60 per square foot.

The organization that makes the expenditures is generally the recipient of the deduction, which can be taken in the year the building is placed in service. In the case of a public building, the designer may take the deduction. The building must be certified by a qualified individual (a licensed engineer or contractor) as meeting the energy cost savings goal.

For more information, visit http://www.energytaxincentives.org/business/commercial_buildings.php