Tax Update Blog

Green incentives in play in budget bill

October 27, 2021 | Blog
By Kristin Gustafson, PE, CEM, BEMP, LEED AP

Many tax proposals have fallen by the wayside in the Congressional budget negotiations - but not those addressing climate change.

Energy Efficiency Incentives, including Sec. 179, the energy efficient commercial buildings deduction and Sec. 45L, the energy efficient home credit, will form a central part of any package that gets through.. Richard Neal (D-Mass), Chair of the House Ways and Means Committee, expects the GREEN Act, HR 848, to be a “starting point as we go forward”. Neal expects to work closely with Senate Finance Chair Ron Wyden (D-Ore.), who has proposed the Clean Energy Act, S. 1298, which also includes updates to the energy tax code.

Key energy provisions of the GREEN Act include raising the 179D deduction from $1.80/sf to $3.00/sf for energy efficiency components, including mechanical, lighting, and building envelope, as well as extending the 45L credit through December 31, 2026.  Additionally, qualifying buildings undergoing energy efficiency upgrades would be eligible for the 179D deduction every three years.

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