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Understanding the 179D Tax Deduction and the Importance of Energy Modeling

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Author: Robert Fassbender
Posted on: August 16, 2024

As the push for energy efficiency continues to shape the future of building design and construction, incentives like the 179D tax deduction have become increasingly important for building owners, designers, and engineers. But what exactly is the 179D deduction, and why is energy modeling so critical in this context? Let’s break it down.

What is the 179D Tax Deduction?

The 179D tax deduction, also known as the Energy Efficient Commercial Buildings Deduction, is a federal incentive designed to encourage energy-efficient construction and retrofits in commercial buildings. Initially introduced as part of the Energy Policy Act of 2005, this deduction allows building owners or designers to deduct a portion of the costs associated with energy-efficient improvements from their taxable income.

For buildings placed in service in 2024, the deduction can be as high as $5.00 per square foot for qualifying energy-efficient measures. This can translate into significant tax savings, especially for large commercial projects. To qualify, the building must demonstrate substantial reductions in energy use intensity (EUI) compared to a baseline established by the ASHRAE 90.1 standard.

The Role of Energy Modeling in 179D

Energy modeling is at the heart of the 179D deduction process. It’s a sophisticated simulation process that allows designers and engineers to predict a building’s energy consumption based on its design, systems, and operational characteristics. Here’s why energy modeling is essential:

Baseline Comparison

What is Energy Model Calibration? Pt 1

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Author: Robert Fassbender
Posted on: January 14, 2021

It seems to me that the whole building energy simulation community has become fixated on the topic of "How to calibrate an energy model." Calibration ensures long term growth of the energy modeling industry because a calibrated model commands respect across multiple disciplines. Calibration is nearly always useful, albeit unnecessary, in many circumstances. First things first:

What does it mean to calibrate an energy model?

In laymen's terms, calibrating an energy simulation means "Gathering the actual energy used by the REAL building, after the building has been fully operational for some time - usually about a year - and then adjusting energy model inputs so that the simulation output more closely approximates the energy consumed by the real building"

When can a simulator calibrate a model?

The simulator requires a completed initial model AND the actual building energy consumption after it has been in full operation for some time (ideally, a full year).  At that point, one can compare the model results to actual data determined by the unique condition called "reality". The simulator may subsequently adjust the model's inputs so that the modeled outputs align best with the building's energy consumption in real-world operation.

Do all models require calibration?

Not all models require calibration. Many simulators do not intend to predict the actual results. Instead, many simulators create models to yield a comparative product. For example, if a simulator calculates electric resistance heating compared to a gas boiler, the simulator expresses the energy cost in terms of a percent difference. In most cases, a calibrated model produces a similar percent difference, especially if the model has reasonable assumptions.

How to add a 2nd meter in eQUEST

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Author: Robert Fassbender
Posted on: October 21, 2020

From the mailbag:

An energy-models.com trainee asked a great question: Can I determine the individual energy consumption of an individual room or zone?

There are multiple options, from creating custom hourly reports and load tracking, but that gets complicated in a hurry. The answer is not perfect but the main thing to do would be create a submeter. 

If a user wants to truly isolate the energy of an individual room, it depends if the room has a room level fan and room level cooling. Otherwise, you can't necessarily determine the exact impact of a room. You could potentially estimate that if a room at 600 cfm of a 6000 cfm fan, that it would be 10% of the fan energy but really only works in the case of a constant volume fan. The cooling and heating would be tricky because it depends on values specific to the zone, including geometry and other schedules. In the case of shared equipment, the KW/ton changes depending on the block load. A secondary meter is your best bet.

To create a 2nd meter:

  • Go to the Utilities and Economics module on the far right (assuming detailed mode).
  • Find the first meter, usually called, "EM1"
  • Right click to create a new meter
  • It will use the default name, "Electric Meter 2" but you can and should name it an appropriate unique name that will act as a descriptor, such as the zone name if you are going to create many of these.
  • Select "Copy Existing Component" in the dropdown. eQUEST should automatically pick EM1 (because it is currently the only choice!) and click okay.

There are many options that will pop up for you to change, but once you create EM2, the defaults will do the job of creating a 2nd meter that is ready to use.

Self-learning is a necessity. I'm living proof

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Author: Robert Fassbender
Posted on: October 21, 2020

I have spent a great deal of my career teaching. Would it surprise you to learn that I am a terrible student? (or not be surprising at all?). I can't seem to pay attention in a classroom. I get too chatty, distracted, or I get too bored. I'm sociable, but learn best by self-study, which I learned in my freshman year of college. I even set a goal of staying awake through an entire lecture hall presentation. I met that goal only once or twice.

It even came to the point where one of my professors singled me out in a lecture hall of about 250 students, I still couldn't stay awake. The professor complained about his dislike of those sleeping in class, and I didn't hear him because I was asleep. Then, he shouted, "Like that guy right there!". I awoke, and he demanded that I come up to the front of the classroom. I was like, "Um, no" because he didn't know my name, and I knew I would say, "I'm sorry, Professor Enchanting" if he let me near the microphone. Too bad he didn't know my name, he would have found it amusing when he saw that I received the 1st or 2nd highest score on the his midterm.

Despite the good grade, it was still a significant flaw, and I'm not proud of it, but that story was pretty funny. I frequently heard it retold, as someone said, "Hey some kid got called out for sleeping in class in a huge lecture hall" and then I would laugh and say, "That was me!" (okay, I was a little proud of that one)

Visual Aid Contest - Project StaSIO

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Author: Robert Fassbender
Posted on: April 9, 2019

Energy Modeling Olympiad 2019 - VOTE

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Author: Robert Fassbender
Posted on: April 9, 2019

Review the rules and scroll to the bottom to vote for the best submission!

How to get paid by turning the heat up

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Author: Robert Fassbender
Posted on: November 28, 2017

If you had done this 4 years ago, you’d be a multi-millionaire.. and you'd be warm.

I was running electric heat in my office to help stay warm. So instead, I turned my desktop into a 200 watt space heater that makes over $2 per day and keeps my office 2 degrees warmer than my space heater. 

All you need is a computer. This can be scaled up in an office. An office could make hundreds or thousands of dollars each night and get free heat.

By now you have probably heard of Bitcoin, even though you may not know what it is. It’s just a new currency (among many others). It’s worth a lot of money. If you need heat, it’s a double bonus. Also, it went up in value by 15x since last year. So, if you were making $2/day last year for 100 days, you’d have least $6000 but as much as $100,000. You can also just take the cash.

You can get setup in about 10 minutes! First, just test it. This is all you need:

  1. A computer with Admin privileges
  2. MinerGate or Nicehash software (Minergate is easier to use)
  3. I'd recommend MinerGate because it works with anything. However, Nicehash pays directly in bitcoin. 
  4. If using Nicehash AMD, here is the direct link to the zip install file.

Most of you will probably use Minergate.

How to Automate Redundant Tasks in TRACE 700

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Author: Robert Fassbender
Posted on: February 17, 2017

Video 1 - Highlight Reel

Video 2 - Quick Intro On Macros

Video 3 - How to automate a TRACE 700 model

How to Model ASHRAE Std 62.1 in eQUEST Part 1

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Author: Robert Fassbender
Posted on: February 15, 2017

How to model ASHRAE Std 62.1 in eQUEST part 1

This video has been moved to  eQUEST 420 -How to eQUEST training videos

What is the Best Energy Modeling Software

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Author: Robert Fassbender
Posted on: May 14, 2015

What is the best energy modeling software?

If you are asking this question, you are probably either really new to energy modeling or really experienced.

Unfortunately, nobody really has the answer to this flawed question. The problem is that best can mean a number of things. Some might think that it means, "The most powerful, flexible, modern software package". But if it takes 5 years to learn how to use it, would it still be the best?

Many would argue that EnergyPlus is the best energy modeling software package. I will say with certainty that, on it's own, EnergyPlus is not the best software package.

Why isn't EnergyPlus the best software package?

EnergyPlus is not a software package at all. It is an engine. It's like saying, "The Ford Ecoboost V6 is the best car in the world" (wait, EnergyPlus is U.S. government funded, so I suppose a GM engine would be a more appropriate analogy, but I use the Ford Ecoboost analogy because I sincerely don't want to insult EnergyPlus).

See, EnergyPlus is an awesome, powerful, flexible (albeit relatively hard to learn) engine. When combined into a package (Engine+Graphical User interface), it is on the list of top contenders.

So what is the best whole building energy modeling software package?

To discuss the best whole building energy modeling software, we should consider: ASHRAE Std 140 approval, power, flexibility, feature-rich, learning curve, existing audience, reports, customization, and maybe a few more things. You might care about cost too. The only free software on the list is eQUEST.

That narrows the discussion of best software down to a few software packages:

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