HVAC Upgrades


There are multiple potential tax savings alternatives for HVAC purchases:

New Buildings - Utilizing EPAct 179D

New Buildings can utilize EPAct HVAC tax deductions. There are 19 HVAC technologies that tend to qualify:

  • Geothermal (Ground Source Heat Pumps)
  • High Efficiency Water Source Heat Pumps
  • Thermal Storage
  • High Efficiency VRF units in Rental Apartments/Dorms/Hotels
  • Centralized HVAC in Rental Apartments/Dorms/Hotels
  • Energy Recovery Ventilation
  • Demand Control Ventilation
  • VFD’s on all major Motors and Compressors
  • Chillers in buildings < 150,000 sq ft
  • Direct fired heaters in no AC Industrial Spaces
  • Industrial Space >75,000sq ft with Constant Volume Package unit
  • VAV (variable air volume devices) in buildings <75,000 sq ft
  • Chilled Beam
  • McQuay Magnetic Bearing Chillers
  • Smardt Chillers
  • Arctic Cool Chillers
  • Gas fired chillers combined with electric chillers to peak shave
  • Coolorado in dry climates
  • Combined Heat and Power

Existing Buildings

Existing buildings can qualify for EPAct by implementing the strategies described above or for replacement tax opportunities described below. Note: qualification for HVAC EPAct tax services is highly dependent on the underlying circumstances of the space.


  • Qualified Package Unit Replacement Expensing (Q-PURE) utilizes guidance from proposed IRS REG-168745-03 as well as precedence set by numerous tax court rulings to allow for the expensing of replacement HVAC package units that meet certain qualifying characteristics.
  • Using typical present value analysis techniques it is equivalent to a 20% discount on the cost of replacing the unit (Equipment and Labor).


  • Qualified Chiller Unit Replacement Expensing


  • Qualified Rooftop Replacement Expense Deduction

Data specifications for these products and more detailed descriptions are available on request.

Contact Energy Tax Savers for a free evaluation.