Publication 5832 — Energy Efficient Commercial Buildings

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p5832.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

Beginning January 1, 2023, the deduction is available to:

Owners of qualified commercial buildings
Designers of EECBP/EEBRP installed in buildings owned by specified tax-exempt entities, including certain: government entities, Indian tribal governments, Alaska Native Corporations, and other tax-exempt organizations

The deduction was previously available only to owners of qualified commercial buildings and designers of EECBP installed in buildings owned by certain government entities.

Amount of the Deduction for 2023 and After

For property placed in service in 2023 and after, the deduction for EECBP equals the lesser of:

The cost of the installed property or The savings per square foot calculated as:

$0.50 per square foot for a building with 25% energy savings
Plus $0.02 per square foot for each percentage point of energy savings above 25%
Up to a maximum of $1.00 per square foot for a building with 50% energy savings
Savings per square foot may be reduced for deductions claimed in prior years.

Buildings That Qualify Prevailing Wage and Apprenticeship

EECBP must be installed on or in a building located in the U.S. and

Bonus

EECBP must be installed on or in a building located in the U.S. and within the scope of a specified Reference Standard 90.1 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America. It must be property for which depreciation or amortization is allowable, and installed as part of the interior lighting systems, the heating, cooling, ventilation, and hot water systems, or the building envelope. It must be certified as being installed as part of a plan to reduce the total annual energy and power costs for the above systems by 25% or more in comparison to a reference building meeting the minimum requirements of Reference Standard 90.1.
EEBRP must be installed on or in a qualified building as part of the interior lighting systems, the heating, cooling, ventilation, and hot water systems, or the building envelope. A qualified building is a building located in the U.S. and originally placed in service not less than 5 years before the establishment of a qualified retrofit plan for the building. EEBRP must be property for which depreciation or amortization is allowable, and it must be certified as meeting certain energy saving requirements.

Beginning in 2023, if local prevailing wages are paid and apprenticeship requirements are met, an increased maximum deduction applies. The maximum amount increases to five times the savings per square foot amount.

This publication provides a general overview. Taxpayers should consult a tax professional before claiming the deduction.

Publication 5832 (8-2023) Catalog Number 94181K Department of the Treasury Internal Revenue Service www.irs.gov