ETS Focuses on Lighting Tax Incentives

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Engineered Tax Services (ETS) recently posted several lighting-focused articles on the 179D tax incentive program set to expire at the end of 2013. 179D was enacted by the Energy Policy Act of 2005 to stimulate investment in energy-saving technologies, though it remains widely unknown in the lighting industry. Non-public commercial buildings (both new and renovated) can claim up to $60,000 for every 100,000 square feet of building space where qualified efficient lighting is installed.

Surprisingly, building owners and designers and engineers are all eligible to take advantage of this incentive, which can improve the ROI of a prospective project. And if the incentive was missed during the design phase, past projects completed after January 1, 2006 remain qualified.

According to the authors – Michael D'Onofrio, managing Director, Don McDougall, national director of corporate accounts, and Jim Sorensen, director of business development – the new lighting must be 40% more efficient than ASHRAE 90.1–2001 standards to receive the full deduction, though partial deductions are available. Lighting improvements are not compared to the systems in place, but to the ASHRAE benchmark.

An LED lighting retrofit, in particular, should easily meet the lighting power density targets for the full incentive, plus provide lower maintenance costs, energy cost savings, and enhanced property value. Because EPAct limits the tax deduction to the capital cost spent on the project, costs may not meet the full $0.60 per square foot ceiling. But additional incentives are available for projects with efficient HVAC and/or building envelope systems, as compared to ASHRAE 90.1.

ETS provides not only tax expertise, but third-party engineering analysis to certify the energy-efficiency measures, as required by the IRS. Their work with Rexel’s lighting group and a financing provider, for instance, has lowered costs to building owners immediately upon retrofit.

ETS presents monthly webinars on 179D tax deductions, and has posted information on a variety of tax benefits available to building owners and designers. Check out

Written by Lois I. Hutchinson –


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