Maximizing Energy Efficiency Incentives: Insights from Kyle Rieth at Catalyst Partners
In a recent webinar hosted by People First Economy, Kyle Rieth, Director of Building Performance at Catalyst Partners, provided valuable insights on energy efficiency incentives available for small businesses and multifamily projects. This session highlighted the key federal programs, especially 179D and 45L, designed to incentivize energy-saving measures.
Understanding 179D: The Energy Efficiency Deduction
179D offers significant tax deductions for energy-efficient buildings. For new construction or major renovations, achieving energy performance improvements can lead to deductions of up to $5 per square foot, particularly if the project exceeds energy performance baselines set by ASHRAE standards.
In Michigan, the current energy code is based on ASHRAE 90.1 2013, with potential updates to ASHRAE 90.1 2019. Many code-compliant buildings may already qualify for 179D deductions due to advancements in lighting and other energy-saving technologies. It’s important for property owners to run energy models to document performance metrics to claim these deductions.
Key Takeaways on 179D:
- Baseline Standards: New constructions must meet or exceed ASHRAE 90.1 2007 to qualify.
- Deductions: Projects meeting energy savings of 25% or more could qualify for $1 to $5 per square foot, depending on whether prevailing wage requirements are met.
- Documentation: Proper documentation, including energy models and site inspections, is crucial for claiming these benefits.
Exploring 45L: The Energy Efficient Home Credit
The 45L tax credit is targeted at single-family and multifamily residential projects, providing opportunities for tax credits based on energy efficiency measures. For multifamily projects, achieving Energy Star certification can yield $500 per unit without prevailing wage and $2,500 per unit with prevailing wage.
Kyle emphasized the importance of early planning and collaboration with certified consultants to navigate the Energy Star certification process. Key requirements include energy modeling, field verification, and testing of systems.
Benefits of 45L:
- Tax Credits: Significant credits per unit can greatly enhance project profitability.
- Marketing Advantage: Certification can enhance the marketability of energy-efficient buildings.
- Consultant Collaboration: Engaging with experts can streamline the certification process.
Tips for Small Businesses
For small businesses looking to leverage these incentives, Kyle recommended:
- Engage Utility Providers: Many utilities offer free audits or assessments that can identify energy-saving opportunities.
- Utilize Find and Fix Programs: These initiatives help address low-cost energy efficiency upgrades, benefiting both tenants and landlords.
- Plan Early: Understanding available programs and aligning project scopes with incentive opportunities is essential for maximizing benefits.
Navigating energy efficiency incentives can seem daunting, but the potential financial benefits make it worthwhile. Whether through 179D or 45L, businesses can enhance their energy performance, reduce costs, and potentially earn substantial tax credits.
Catalyst Partners is available to assist businesses in navigating these opportunities, providing expertise in energy modeling and certification processes. For more information, or to explore how these incentives can work for your business, consider reaching out to the team at Catalyst Partners or your local utility providers.
Click here to access Kyle’s full presentation.
Watch the full session here:
