“The Senate tax extenders bill includes several useful provisions to increase energy efficiency in homes and businesses, including updating current law in important ways so that the energy savings per federal buck are maximized,” said ACEEE Executive Director Steven Nadel.
Today the Senate Finance Committee marked up the EXPIRE Act. The bill includes several important provisions to extend and improve tax incentives for energy efficiency, including:
- Extending the homeowner credit for energy efficiency measures (section 25C of the tax code) and updating criteria to reflect advancing efficiency in the marketplace
- Extending the 179D credit for efficient commercial buildings and raising the minimum requirements in 2015
- Extending the 45L credit for builders of efficient new homes
The updated criteria reflect the fact that products in the marketplace are becoming more efficient, in part due to the previous tax credits.
In addition, Sen. Carper (D-DE) filed an amendment to the Section 48 combined heat and power (CHP) credit, which would allow waste heat to power systems in order to qualify for the credit, correcting a technical error in the original 2008 legislation. Senator Carper indicated he wanted to continue working with the chairman to address this error.
As the bill moves forward to the floor, we hope the Senate will consider other energy efficiency tax credit provisions. Some of these are in a bill introduced on Tuesday by Senators Cardin, Feinstein (D-CA), and Schatz (D-HI). The Energy Efficiency Tax Incentives Act (S. 2189) would also:
- Provide a credit related to the 25C credit for comprehensive whole-home retrofits
- Provide a credit that builds on 179D to encourage whole-building retrofits to existing commercial buildings
- Modify and extend the Sec. 48 credit for CHP to provide higher incentives for very efficient systems
- Create a new tax credit to replace old cooling systems that use CFC refrigerants with high-efficiency systems that do not use refrigerants that deplete the ozone layer
- Implement a new tax credit for equipment manufacturers to include advanced motors in their equipment designs, intended to address the reengineering costs.
We also are encouraged by Chairman Wyden’s assertion that he wants to move forward with comprehensive tax reform. We encourage the committee to consider ACEEE recommendations on depreciation and long-term tax incentives that would encourage energy efficiency as part of comprehensive tax reform.