Tax Credit & Incentives

Tax Credits & Financial Incentives

The Inflation Reduction Act of 2022 extended and expanded a number of federal tax credits for energy efficiency and renewable energy, including:

Energy-Efficient Commercial Buildings Deduction: This deduction allows businesses to deduct the cost of certain energy-efficient improvements to their commercial buildings.

Energy Modelling for Section 179D: Federal Tax Credit Solar photovoltaic (PV) systems are crucial in achieving energy and carbon neutrality goals. The electricity generated from solar PV is virtually carbon-free, as it doesn’t produce greenhouse gas emissions during operation. There are incentives, tax credits, and rebates for solar PV installations. DSIRE has not updated the National, State, or City incentives for 2024.

 

State and Local Tax Credits

In addition to federal tax credits, many states and local governments also offer tax credits and other financial incentives for energy efficiency and renewable energy. To learn more about what incentives are available in your area, you can visit the Database of State Incentives for Renewables & Efficiency (DSIRE) website.

LEED Tax Credits

Some states and local governments also offer tax credits for buildings with LEED certification. For example, California offers a tax credit of up to $1.50 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

 

In addition to the state tax credits

Many local governments also offer tax credits and other financial incentives for energy efficiency and renewable energy. To learn more about what incentives are available in your area, you can visit the Database of State Incentives for Renewables & Efficiency (DSIRE) website.

The following table provides a summary of state and local tax credits for LEED, energy, and water efficiency improvements:

Please note this is not an exhaustive list of all state and local tax credits for LEED, energy, and water efficiency improvements. For more information, please consult with a tax professional.

 

In addition to tax breaks, several other incentives are available for LEED, energy, and water efficiency improvements. These incentives can vary from State to State and city to city, but some examples include:

  • Rebates: Many utilities and government agencies offer rebates for energy efficiency improvements, such as new appliances, insulation, and windows.
  • Low-interest loans: Some banks and credit unions offer low-interest loans for energy efficiency improvements.
  • Property tax breaks: Some states and cities offer property tax breaks for homes and businesses that achieve LEED certification or make other energy efficiency improvements.
  • Grants: Some government agencies and nonprofits offer grants for energy efficiency improvements, especially for low-income residents and businesses.
  • Performance contracts: Performance contracts allow businesses to pay for energy efficiency improvements over time out of the energy savings they generate.

To learn more about current incentives available in your area, visit the Database of State Incentives for Renewables & Efficiency (DSIRE) website.

If you are considering making LEED, energy, and or water efficiency improvements to your Project, research the available incentives in your area. By taking advantage of these incentives, you can save money on the upfront cost of improvements and reap the many benefits of energy efficiency.

 

State

Tax Credit

Description

California

Commercial Green Building Tax Credit

Provides a tax credit of up to $1.50 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Colorado

High Performance Building Tax Credit

Provides a tax credit of up to $5 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Connecticut

Green Buildings Tax Credit

Provides a tax credit of up to $0.50 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Hawaii

Green Building Revolving Fund

Provides grants and loans to businesses and homeowners for green building projects, including LEED certification.

Illinois

Green Building Tax Credit

Provides a tax credit of up to $5 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Maryland

Commercial Green Building Tax Credit

Provides a tax credit of up to $1.50 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Massachusetts

Green Building Tax Credit

Provides a tax credit of up to $1 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Minnesota

Commercial Green Building Tax Credit

Provides a tax credit of up to $1 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

New Jersey

Green Building Tax Credit

Provides a tax credit of up to $2 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

New Mexico

Green Building Tax Credit

Provides a tax credit of up to $2 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

New York

Green Building Tax Credit

Provides a tax credit of up to $3 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Oregon

Commercial Green Building Tax Credit

Provides a tax credit of up to $2 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Pennsylvania

Green Building Tax Credit

Provides a tax credit of up to $1.50 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Rhode Island

Commercial Green Building Tax Credit

Provides a tax credit of up to $2 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Vermont

Commercial Green Building Tax Credit

Provides a tax credit of up to $2 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.

Washington

Commercial Green Building Tax Credit

Provides a tax credit of up to $1 per square foot for commercial buildings that achieve LEED Gold or Platinum certification.