Submittal

that satisfies both of the following conditions:

(a) The property is installed as part of the heating, cooling,

ventilation, and hot water systems of a building; and

(b) It is certified that the heating, cooling, ventilation, and hot water

systems that have been incorporated into the building, or that the taxpayer plans to

incorporate into the building subsequent to the installation of such property, will reduce

the total annual energy and power costs with respect to combined usage of the

building’s heating, cooling, ventilation, hot water, and interior lighting systems by 16⅔

percent or more as compared to a Reference Building that meets the minimum

requirements of Standard 90.1-2001. The required 16⅔-percent reduction must be

accomplished solely through energy and power cost reductions for the heating, cooling,

ventilation, and hot water systems. Reductions in any other energy uses, such as

receptacles, process loads, refrigeration, cooking, and elevators, are not taken into

account in determining whether the 16⅔-percent reduction is achieved.

(2) Maximum Amount of Deduction.

(a)

In General. The deduction for the cost of energy efficient

heating, cooling, ventilation, and hot water property installed on or in a building shall not

exceed the excess (if any) of--

(i) the product of $0.60 and the square footage of the

building, over

(ii) the aggregate amount of the § 179D deductions allowed

with respect to energy efficient heating, cooling, ventilation, and hot water property