Most people, unless you involved in finance, accounting or a related profession, don’t sit down and actually read the Internal Revenue Code or IRC. The IRC is the federal law regarding taxation within the United States. It applies to both private citizens and business and codifies all the laws into one specific location.
The IRC Section 179D is important for commercial building owners, ESCO’s (Energy Service Companies), architects and contractors since it defines the deductions that any commercial property is eligible to apply for if they meet specific energy reduction standards.
Definitions and Terms
One of the important aspects of the IRC Section 179D is that it clearly defines what can be considered a building, what is considered energy efficient and what are considered the standards that will be used in the Act. For the Energy Policies Act of 2005 the ASHRAE Standards 90.1-2001 and the Illuminating engineering Society of North America are the standards in use today.
In addition the definitions set forth the three components or subsystems in the building that are addressed in the law including the heating and cooling systems (which also includes the hot water and ventilation) as well as the interior lighting and the building envelope.
Another important feature found in the IRC Section 179D is the defining of the type of computer software that can be used in showing the energy consumption of the systems in the building. The software designer has to have the computer software approved, in this case by the Secretary of Energy, to be used to prepare the models and reports needed for certification.
Other information contained in IRC Section 179D include the procedure for certification, including the requirement for qualified individuals to complete inspections, testing and certification using similar procedures to other professionals.
This ensures that all buildings that are certified have the same procedure and steps involved in the process. Without this in the law then every company offering certification could use their own standards and process, invalidating the accuracy and efficiency testing that is such an essential part of this program.
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