Big Federal LED Rebate for Commercial Buildings: 179D

LEDs have revolutionized lighting. They can produce a wide range of color temperatures using 50% to 90% less electricity than previous generations of lighting. Also, because they last 5-6 times longer than incandescents and fluorescents, you save a considerable amount of money on maintenance costs. The 179D Commercial Building rebate from the Federal government means the simple payback period of LEDs will fall from a couple years to a couple months. This program expires December 31st, 2020. We can help you take advantage of it while you still can!

So how does it work? If upgrading your lighting to LEDs will reduce your lighting power density by 25% or more, you can earn 60¢ per square foot of the upgraded area in the form of a tax deduction. Thus if your effective total income tax rate is 30%, that would mean you save 18¢ per square feet. These savings can be dramatic.

What’s more is that you can earn the 60¢/sqft deduction for up to 3 types of improvements: lighting, building envelope, and heating. As such, you can get up to $1.80/sqft in total deductions.

For example, we recently helped a 144,000 sqft commercial warehouse with an LED and building envelope combined project that cost $56k. We estimate it will reduce their annual lighting and heating expenses by 78% or $19k on their electric bill. That’s a simple payback period of nearly 3 years. Using the 179D cost deduction, we helped our client qualify for over $51k in rebates, bringing the total cost down to $14.5k. Now the payback period is only 8 months and the improvements are expected to last well over a decade.

These figures include the required cost to hire a third party company to perform testing and verification on the improvements. This typically costs 15% of the total rebate or 4.5% of the total project cost.

It’s unclear if these rebates will return after December 31st, 2020. We still have time to qualify for these rebates, so please reach out to us soon at the form below or with web chat.