This company designed and installed HVAC and plumbing systems in new and existing buildings within multiple industries, including multifamily, commercial, and industrial, among others. The team identified projects that aimed to develop high-performing, functioning, and reliable designs as potentially qualifying. Once the potentially qualifying project population was set, the team performed in-depth interviews with each entity’s technical subject matter experts to determine if each project qualified. Projects were deemed qualified if they contained substantial technical uncertainties or challenges throughout the course of the project, and there was a process of experimentation to overcome those challenges.

Typically, the company’s project team encountered uncertainty related to the mechanical system’s appropriate design aimed to successfully achieve the high-performance metrics necessary for the new system. This uncertainty continued through the installation phase of each project, as the construction team identified issues or roadblocks that caused cascading design changes. In an attempt to overcome these challenges, the project team relied upon a process to evaluate construction methods and techniques along with advanced modeling software to evaluate design changes and alternatives. On a large project, the project team performed modeling and evaluations for nearly 40 miles of piping throughout a building. With this amount of pipe, one small design change to a section of piping could result in a cascading impact on piping later down the line.

Result: The company accumulated a credit of about $7,500,000 over two years. Note: this credit was sustained successfully under a rigorous IRS audit.