Push to Revive Energy Efficiency Tax Credit for Buildings Grows

Factions of the U.S. Congress continues to push to revive a now-expired energy efficiency tax credit for buildings. Last week, the Senate Finance Committee passed the Expiring Provisions Improvement Reform & Efficiency (EXPIRE) Act with an amendment that would reinstate the 179D tax deduction for energy efficiency improvements in commercial and multifamily buildings under a two-year extension.

Created under the Energy Policy Act of 2005, the deduction was the only federal tax incentive available that encouraged energy savings in public and private buildings, according to press release from Senator Rob Portman (R-OH), who introduced the amendment to reinstate the deduction to the EXPIRE Act.The credit allows a maximum deduction of $1.80 per square foot for a 50 percent reduction in total annual energy and power costs over a comparable building meeting the minimum requirements of ASHRAE 90.1-2001. The credit expired on Jan. 2, 2014, however the passed amendment would grant the deduction a two-year extension retroactive to the beginning of 2014 and lasting through Dec. 31, 2015. The amendment also allows nonprofits and tribal governments to qualify for the 179D deduction.

"Designing maximum energy savings into every structure is the hallmark of the value proposition architects offer our clients" Robert Ivy, FAIA, AIA CEO said in the Portman press release. AIA members were active in advocating for the amendment's passage. "Extending the 179D tax deduction will help architects and designers continue to be major catalysts behind the revolution occurring in sustainable and resilient buildings, as well as encourage energy conservation throughout the built environment."

The National Association of Home Builders (NAHB) also supported the vote. "Extending the 179D tax deduction will help multifamily builders ease the high initial costs of energy efficient features," NAHB chairman Kevin Kelly said in the Portman release. "This incentive has been particularly successful because it doesn't' favor certain products or technologies, but instead allows builders and homeowners to identify the best solutions for their needs, while also encouraging energy efficient choices."

The USGBC also applauded the committee's passage of the EXPIRE Act, noting that it contains additional provisions related to community development, and low-income housing.

The move is the latest Federal development related to energy efficiency in buildings, as the passage in the Senate Finance Committee comes on the heels of the introduction of the Energy EfficiencyTax Incentives Act and the reintroduction of the Energy Savings and Industrial Competitiveness Act (also sponsored by Sen. Portman).