The electrical contracting industry specifies, installs and services products that move America toward less energy consumption, lower carbon emissions, and more efficient use of our resources. However, widespread adoption of energy-efficient technologies has been slow due to economical, governmental, and marketplace barriers. Federal tax incentives encourage building owners and other purchasers to help improve the energy performance of buildings and facilities and deliver tremendous benefits in terms of job creation, energy savings and greater competitiveness.
The impasse in Washington over tax policies and curbing federal spending has created considerable uncertainty in the American business community. With all the debate over specific ways in which the federal government can cut unnecessary spending and reduce the budget (and there are many), federal spending and incentives in energy efficiency programs should not be part of the discussion. Why?
Energy Efficiency Incentives Will Create Jobs, Reduce Energy Costs, and Improve the Environment. An analysis by the American Council for an Energy Efficiency Economy (ACEEE) of the job creation and energy savings benefits of previously introduced energy efficiency tax incentive legislation indicates that 187,000 jobs would be created. These incentives also will result in $3.3 billion in annual energy bill savings. And, from an environmental perspective, the incentives result in reduced emissions equivalent to nearly 4 million cars.
Buildings Hold the Greatest Potential for Energy Savings. Buildings use more energy than any other sector of the U.S. economy, consuming more than 70 percent of electricity and over 50 percent of natural gas. There is 74.8 billion square feet of non-residential space in the U.S. according to the U.S. Department of Energy, and less than eight percent (8%) of these buildings can be considered energy efficient. Investment in energy efficiency makes buildings healthier, less costly to operate, and more environmentally sustainable over their entire life cycle. Energy efficient building systems, therefore, remain critical to tenants, the owner’s costs, as well as to our environment.
It is for these reasons that the National Electrical Contractors Association (NECA) urges Congress to pass comprehensive changes in tax policy to real property owners to invest in energy efficient and energy conserving building technology. The following proposals will help meet the government’s goals of reducing buildings’ energy and operating costs; creating construction jobs; encouraging technological innovation; expanding markets for energy efficient products and services; improve occupant productivity; and optimize building life cycle economic performance:
· Extend the Energy Efficiency Commercial Building Tax Deduction (179D) beyond 2013.
· Increase the Deduction from $1.80 to $3.00 per square foot.
· Expand the Commercial Building Tax Deduction to include specific lighting technologies and for other technologies that improve building energy performance, such as upgraded lighting controls and variable speed drives.
· Expand tax incentives for cogeneration or combined heat and power.
· Extend the Treasury Department’s Section 1603 cash grant program for investment in renewable energy.
· Extend tax credits for purchase of electric vehicles and for alternative fuel vehicle refueling property (electric vehicle charging stations).
· Expand incentives for incorporating renewable energy sources into a building’s power system.
· Reduce the recovery period for investment in electricity transmission lines and smart grid devices from 20 years to 10 years.
In the event Washington decides against such pro-energy efficiency, pro-U.S. economy, and pro-environmentally conscious incentives, the trend toward energy efficiency and environmental consciousness should and must continue. Energy efficiency remains vital to us as individuals, as well as to our country, and the environment – and we must, as a business community, continue to become more energy efficient. For building owners and developers, that means allocating budgets to improve the building’s energy efficiency. Energy efficient building technologies will pay off in more ways than one.
Glenn Kingsbury is the executive manager of the National Electrical Contractors Association (NECA) Boston Chapter.