Vol. 22   No. 1
March 2016
  • MGE Talks Business
Hot Topics

New and extended federal tax credits and deductions for renewable energy and energy efficiency

New and extended federal tax credits and deductions for renewable energy and energy efficiency

Looking for affordable ways to save energy or increase your commitment to renewable power? At the end of 2015, the federal government passed a $1.1 trillion spending package that included incentives for businesses and commercial building owners to reduce their energy use. This is in addition to a July 2015 extension of alternative fuel tax credits.

Here's an overview.

  • Investment tax credits extended for solar: This investment tax credit was scheduled to end in December 2015 and is now extended through 2021. You have more time to save money on a solar investment and to investigate your options, find a reputable installation team and go live with your installation.
  • Investment tax credits extended for wind power: The bill also extends current wind facility tax credits.
  • The 179D Energy Efficient Commercial Building Tax Deduction was extended until Dec. 31, 2016, for projects put in service before Jan. 1, 2017.
  • Commercial building owners and tenants who make new or renovated buildings more energy efficient are eligible for a federal tax deduction of up to $1.80 per square foot. The deduction is available in three parts for up to $0.60/SF for lighting, HVAC and building envelop improvements. For example, a new commercial office building of 50,000 SF that attains compliance with the lighting and HVAC energy savings requirements could receive a $1.20/SF x 50,000 SF or a $60,000 deduction.
  • The qualifying threshold has been changed to require compliance with ASHRAE 90.1 2007. To realize the deduction, the update must perform at least 50% better than the ASHRAE-defined reference building. There are requirements for how energy performance certification must be done and who can do it.

MGE is bringing these items to your attention. Please ask your tax advisor how your business may benefit.

Learn more!

Available government tax credits
Heating and cooling equipment standards