President Obama urged businesses to make their buildings more energy efficient and called on Congress to provide tax incentives to help.
During a speech at Penn State University on Thursday, Obama advocated an aggressive reform of existing tax and other incentives for commercial building retrofits and proposed a new competitive grant program. He called on Congress to redesign the current tax deduction for commercial building upgrades, in order to transform the current deduction to a credit that is more generous. Obama believes that will encourage building owners and real estate investment trusts to retrofit their properties. The changes could result in a ten-fold increase in commercial retrofitting, leveraging job-creating investments, according to the White House.
“It’s time to stop subsidizing yesterday’s energy and start investing in tomorrow’s,” said Obama.
Last year, commercial buildings consumed roughly 20 percent of all energy in the U.S. economy, according to the White House. The President’s Better Buildings Initiative aims to make commercial buildings 20 percent more energy efficient over the next decade by catalyzing private sector investment through a series of incentives to upgrade offices, stores, schools and other municipal buildings, universities, hospitals, and other commercial buildings.
The initiative builds on investments already made through the American Recovery and Reinvestment Act, and the Obama administration’s continued efforts to passing proposed “Homestar” legislation to encourage American families to make energy saving upgrades in their homes.
Under the Obama administration plan, by 2020, commercial building space in the U.S. would become 20 percent more energy efficient through cost-effective upgrades. Reaching that goal would allow businesses to reduce their energy bills by about $40 billion at today’s prices, according to the White House.
House Ways and Means Committee ranking member Sander M. Levin, D-Mich., praised Obama’s call to extend and expand energy tax incentives during the appearance in Pennsylvania.
“I strongly support President Obama’s call for energy efficiency tax incentives,” he said in a statement. “Advanced energy tax incentives are vital as we seek to lay the foundation for a new era in American manufacturing and innovation as well as reduce our overall energy consumption. In addition to incentives for energy efficiency upgrades, we must renew the successful 48C tax credit for advanced energy manufacturing, which has supported more than $7 billion in investments for domestic manufacturing facilities. Other important incentives that expired last year, such as the tax credits for purchasing heavy duty hybrids and natural gas vehicles, should be brought back. These incentives are vital parts to the public-private partnership, which is essential to accelerating technology advancements and job creation in advanced manufacturing and alternative energy. We will press to keep them high on the jobs agenda.”
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