Don't Miss Out: Why Energy Efficiency is Your Best Business Move in 2026

If you’re a commercial property owner or a contractor, the next 18 months represent a high-profit window for those who know how to play the game. Thanks to a unique combination of high tax incentives and smarter technology, energy efficiency, clean energy, and energy modeling are the most positive moves you can make for your bottom line right now.

While the signing of the One Big Beautiful Bill (OBBB) in mid-2025 shifted the federal landscape, it created a massive "sunset window." For those who break ground soon, the financial returns are at an all-time high—but there is now a hard deadline to act.

The 179D Tax Shield: Up to $5.94 per Square Foot

The Section 179D Energy-Efficient Commercial Buildings Tax Deduction has evolved into a powerhouse financial engine.

• The "Bonus" Reality: While the base rate starts at $0.59/sq. ft., the enhanced pathway allows you to claim up to $5.94/sq. ft. (2026 adjusted rate) for high-performing projects.
• The Construction Deadline: To lock in these high rates, construction must begin by June 30, 2026.
• The Contractor’s Edge: On projects for nonprofits, schools, or government agencies, the owner can allocate this deduction to you. This allows the contractor or designer to claim the tax win directly, boosting your profit margin without increasing the bid price for the client.

Clean Energy & Elective Pay (Section 48E)

For owners of any type—private, public, or nonprofit—clean energy assets like solar or battery storage are now a "cash-back" investment under the Section 48E Clean Electricity Investment Credit.

• Direct Pay for All: The OBBB maintained Elective Pay (Direct Pay) for tax-exempt entities. This means nonprofits and local governments receive a direct cash refund from the IRS for 30% or more of the project cost.
• The 2026 Cliff: To qualify for these credits, wind and solar projects must "begin construction" by July 4, 2026.

Energy Modeling: Turning "Compliance" into "Profit"

In 2026, energy modeling is no longer just a technical requirement—it is a profit-maximization tool.

• Guaranteeing the Payout: To claim 179D, you must prove a 25%–50% efficiency gain against the ASHRAE baseline. Modeling allows you to "test" your systems virtually to ensure you hit the target before you spend a dime on materials.
• Right-Sizing for Savings: Intelligent modeling often reveals that a high-efficiency building requires smaller, less expensive HVAC units. This can save more in up-front capital (CAPEX) than the cost of the model itself.

Potential 179D Savings: 2026 Reference Table

Your Next Steps: Lock It In with BSW

The most expensive mistake you can make in 2026 is waiting.

As a BSW Partner, we provide the specialized team you need to bridge the gap between "engineering" and "accounting." Our certified engineers use IRS-approved software to find your maximum savings. Our tax professionals ensure you (or your contractors) receive every dollar through the 179D allocation and 48E credits.

The window for these peak benefits closes in mid-2026. Contact us today to see how much your building is currently leaving on the table.

Official Government Portals & IRS Guidance:

• Congress.gov – Full Text of H.R. 1 (OBBB Act): https://www.congress.gov/bill/119th-congress/house-bill/1/text

• IRS Newsroom – Official OBBB Provisions & Impacts: https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

• IRS Form 7205 Instructions (Deduction for 179D): https://www.irs.gov/pub/irs-pdf/i7205.pdf

• IRS Notice 25-42 – Beginning of Construction for 48E: https://www.irs.gov/pub/irs-drop/n-25-42.pdf

• U.S. Department of Energy – 179D Technical Modeling Portal: https://179d-portal.energy.gov/

• U.S. Treasury – Elective Pay (Direct Pay) Official Explainer: https://home.treasury.gov/system/files/8861/ITC%20Elective%20Pay%20Explainer%20vF%201224_0.pdf