The signing of the One Big Beautiful Bill Act (OBBBA) ended months of anticipation over the impact proposed tax changes could have on environmental strategies. As we now know, certain initiatives—including solar and wind energy technologies—took a large hit. This was due to the OBBBA significantly expediting phaseouts of clean energy tax credits established by the Inflation Reduction Act of 2022.
Fortunately, other technologies that support thermal energy storage will continue to offer both environmental benefits from the technology itself and the benefits of tax credits. These solutions include mineral fiber ceiling panel options that harness the capability of phase change materials (PCM) to regulate room temperature without electricity or other power sources.
Given the impact of OBBBA, energy saving ceiling solutions may have an expanded role to play in building design, operation, and management decisions. One reason for this is that, tax incentive or not, the motivation for facility builders, owners, and operators to advance sustainability and decarbonization goals remains unchanged. The drive of a company or organization to be environmentally responsible will not vanish along with certain energy tax incentives. Still, the availability of tax credits can be an important consideration when looking at the overall design—and related budget—of a new construction or renovation project. Once again, this is where energy saving ceiling solutions can help.
How Energy Saving Ceilings Work
The built environment’s drive to decarbonize, save energy, and employ thoughtful use of resources presents architects and designers with a new set of requirements for new construction or renovations. Adding to the challenges is facility owners prioritizing elevated indoor environmental quality (IEQ) for occupants. This can mean everything from maintaining comfortable temperatures to achieving proper acoustics. These mandatories have turned the attention of architects and designers to ceiling panels with PCM. In addition to thermal energy storage allowing passive heating and cooling to keep a space at a comfortable 72 degrees F., these panels offer strong acoustical performance.
Although the use of PCM technology in ceiling panels is a recent innovation, its roots go back centuries. Consider an old-fashioned “icebox.” The ice (PCM) absorbs heat to keep the box contents cool. During this process the ice changes to a liquid, which will again solidify at temperatures of 32 degrees F., releasing heat.
To understand energy saving ceiling panels, think of the “ice” as PCM (basically comprised of salt and water) encased in the ceiling panel. When temperatures rise in a space with energy saving ceilings installed, the crystalized PCM gradually dissolves. During this process, it absorbs and stores heat to passively cool the space. As that space cools stored heat is released, the PCM in the ceiling panels re-solidifies, and the space warms up. Heat transfer happens around 72 degrees F., making energy saving ceilings effective for cooling and heating—supporting thermal comfort without mechanics, energy expenditure, or fossil fuels.
According to research estimates measured in laboratory tests, ceiling panels with PCM technology can reduce energy costs and consumption by as much as 15% (results may vary). In addition, energy saving ceilings offer advantages including:
- Reduced reliance on fossil-fuel powered HVAC systems
- Less wear on HVAC systems, an alternative to more costly HVAC system upgrades or replacements
- Improved thermal comfort
- Ability to enhance IEQ with features like acoustical sound blocking and absorption
- Easy installation, little-to-no maintenance
Energy saving ceiling products also fit into the thermal comfort portion of the WELL Building Standard and can contribute to many LEED credits, including Materials & Resources, IEQ, and Energy & Atmosphere credits. Moreover, energy saving ceilings align with two key impact areas established with the recently introduced LEED v5—decarbonization that targets reduction in operational and embodied carbon and other emissions, and quality of life improvements in health, well-being, resilience, and equity for building occupants and their communities.
Up to 50% in Tax Credits Available Under the Inflation Reduction Act
In addition to energy-saving, lower maintenance, and other cost benefits realized over the lifetime of their use, PCM ceiling panels qualify for certain tax credits. Projects utilizing energy-saving ceiling panels may qualify for Investment Tax Credit (ITC) 48E. Because of their thermal energy storage properties, most projects using PCM ceiling panels may qualify for:
- Up to 40% federal tax credit
- Additional 10% tax credit if the project is deployed in an “Energy Community.” (i.e., a Brownfields site or fossil-fuel-dependent community)
As part of the process, it’s advisable to consult your tax advisor to confirm qualification of your project. In addition, talking with the ceiling manufacturer might reveal additional opportunities to help maximize tax savings opportunities when investing in energy-saving ceilings for a project. For example, when installing a ceiling, in addition to the energy saving ceiling panels, it’s possible the associated grid, trim, and labor may also qualify for tax credits under ITC 48E. Because these panels are made in the USA of domestic and global content, they also meet a requirement for additional tax savings.* Qualifying energy saving ceiling projects include those of taxpayers and non-taxpaying entities and span multiple sectors, including public, private, education, and 501 (c)(3) charitable organization.
From Building Optimization to Bottom-Line Improvements
In June, energy saving ceiling products were introduced into a leading energy-modeling resource (the IES Virtual Environmental software), used by engineers and architects to optimize whole-building performance. To become part of the software, these ceilings underwent a rigorous validation process involving hundreds of modeling studies. The inclusion of the PCM ceiling panels in this software further demonstrates their potential to support decarbonization priorities and offers a strong indication of the longevity they will enjoy as an energy-saving solution.
From government, corporate headquarters and nonprofit offices to healthcare, schools and college facilities—the applications in which energy saving ceilings can impact a building’s environmental objectives, energy-reduction criteria, IEQ requirements, and the bottom line are expansive. Moreover, the ramping up of energy saving ceiling validation and adoption couldn’t be better timed, as their use could help fill some of the “budgetary gap” left by OBBBA’s phaseout of tax credits on other energy technologies.
* This article lists various federal tax credits and deductions that your project may qualify for when purchasing Armstrong Templok Energy Saving Ceilings. Please consult your own tax attorney or advisor. LEED® is a registered trademark of the U.S. Green Building Council; WELL Building Standard is a trademark of the Well Building Institute.
