HVAC System Upgrades
Installing or improving energy-efficient heating and cooling systems.
Efficiency Rewarded
Reward the work that makes buildings more efficient.
Building owners invest in better lighting, higher-performance HVAC and a tighter envelope every day — often without realizing those improvements may unlock a substantial federal deduction under Section 179D. Freedom Alliance coordinates the engineering certification, energy modeling and documentation required to capture the deduction alongside your CPA.
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The Fundamentals
What is the Section 179D deduction?
A federal deduction — often overlooked outside of large development projects — written specifically to reward energy-efficient design and construction in commercial and qualifying tax-exempt buildings.
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A permanent federal deduction
Section 179D was made permanent by the Consolidated Appropriations Act of 2021 and enhanced under the Inflation Reduction Act — giving owners and designers a lasting incentive to invest in energy-efficient commercial buildings.
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Up to $5.65 per square foot
The deduction can reach up to $5.65 per square foot for qualifying projects meeting prevailing wage and apprenticeship requirements, with a base deduction still available for projects that don't. On a large facility, that's often a six or seven-figure benefit.
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Three building systems, one incentive
Interior lighting, HVAC and hot water systems, and the building envelope are all eligible categories. Improvements to any combination of these systems can qualify, based on energy performance modeled against an ASHRAE reference standard.
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Not just for owners
For government-owned, tribal and — under the IRA — tax-exempt buildings, the deduction may be allocated to the primary designer of the energy-efficient systems: the architect, engineer or design-build contractor responsible for the improvements.
Who May Qualify
Who may qualify.
Section 179D reaches far beyond building owners. Architects, engineers and design-build contractors responsible for the energy-efficient systems in government, tribal and tax-exempt buildings may also be eligible to receive an allocation of the deduction.
- Commercial Property Owners
- Architects
- Engineers
- Design-Build Contractors
- Mechanical Engineers
- Electrical Engineers
- Government Building Designers
- Schools
- Hospitals
- Universities
- Municipal Buildings
- Nonprofit Organizations
…and many more.
Qualifying Projects
Examples of qualifying projects.
Section 179D rewards a wide range of energy-efficient work — from targeted system upgrades to new construction and major renovations across commercial, government and tax-exempt buildings.
Interior Lighting Improvements
Replacing lighting systems with qualifying energy-efficient designs.
Building Envelope Improvements
Improving insulation, roofing, windows, or exterior building systems.
New Commercial Construction
Designing new buildings that exceed required energy efficiency standards.
Major Renovations
Upgrading existing commercial buildings with qualifying energy-efficient improvements.
Government & Tax-Exempt Projects
Architects, engineers, and design-build contractors working on qualifying government or nonprofit buildings.
Our Process
A structured, coordinated engagement.
Every 179D study follows the same disciplined path — clear at every step, respectful of your team's time, and coordinated with your CPA from start to finish.
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Complimentary Eligibility Review
A short, no-cost conversation to understand your building or project and confirm whether a 179D study is worth pursuing.
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Building & Project Review
We gather construction drawings, specifications, equipment cut sheets and — for public projects — the allocation letter framework.
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Energy Modeling & Technical Analysis
Licensed engineers model the building against the applicable ASHRAE reference standard using IRS-approved software to quantify energy savings.
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Deduction Calculation
Qualified square footage and per-foot rates are applied to calculate the final federal deduction, including any prevailing wage bonus.
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CPA Coordination
Deliverables are packaged for your CPA with clean workpapers, schedules and a filing-ready summary of the deduction.
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Documentation & Compliance Support
You receive an audit-ready certification package and continued support in the event of IRS or state inquiry.
Why Freedom Alliance
A strategic advisor, not just a study.
We coordinate licensed engineers, manage the certification process, and work alongside your CPA so the deduction is captured cleanly and defensibly — with minimal lift on your team.
Complimentary Eligibility Review
A no-cost, no-obligation review so you understand the opportunity before committing to anything.
We Work With Your Existing CPA
Every engagement is structured to complement — not replace — the tax advisor you already trust.
Licensed Engineers & Inspectors
Certifications are prepared by licensed professional engineers with deep experience in 179D energy modeling.
Audit-Ready Documentation
Every study is delivered with a complete, defensible certification package built to withstand IRS scrutiny.
White-Label Partner Solutions
CPA firms and design partners can offer 179D studies to their clients under their own brand, fully supported behind the scenes.
End-to-End Project Management
One accountable point of contact coordinates every party — your team, your CPA and our engineers — from kickoff to delivery.
FAQ
Frequently asked questions.
A few of the questions we hear most often from building owners, architects and CPAs exploring Section 179D for the first time.
What is the 179D deduction?
The 179D deduction rewards energy-efficient improvements made to commercial buildings. Qualifying projects such as lighting, HVAC, hot water, and building envelope upgrades may generate significant tax deductions for eligible building owners or designers.
Who qualifies?
Building owners, architects, engineers, designers, and certain contractors may qualify, depending on the project and who owns the deduction. Eligibility depends on the building type, energy savings achieved, and project details.
Do I have to own the building?
Not always. While commercial building owners often claim the deduction, architects, engineers, and designers working on qualifying government, nonprofit, tribal, or certain tax-exempt projects may also be eligible through a deduction allocation.
Can architects and engineers qualify?
Yes. When designing qualifying energy-efficient buildings for government or other eligible tax-exempt entities, architects, engineers, and other designers may receive the 179D deduction through an allocation from the building owner.
What types of buildings qualify?
Commercial office buildings, medical facilities, schools, hotels, warehouses, manufacturing facilities, retail centers, and many other commercial properties may qualify if they include energy-efficient improvements that meet IRS requirements.
How much could the deduction be worth?
The value depends on your building's size, energy savings, and whether prevailing wage and apprenticeship requirements are met. Qualifying projects can generate significant tax deductions that reduce your federal tax liability.
What documentation is required?
We coordinate the required engineering analysis and prepare the technical documentation needed to support your deduction. Our team works directly with your CPA to provide a complete, audit-ready package.
Will this replace my CPA?
No. We work alongside your existing CPA—not instead of them. Our role is to identify opportunities, coordinate the engineering study, and provide the documentation your CPA needs to claim the deduction accurately.