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Policy Center

RETROFITS

It’s said that the most sustainable building is the one never built. Investing in the retrofit of existing buildings to make them more sustainable carries enormous potential for reducing energy use and protecting the environment – not to mention for creating well-paying jobs. For many building owners—from homeowners to businesses, not-for-profit institutions, local governments and others—energy  costs are an increasingly large portion of their budget. But for many owners, the initial first costs of energy efficiency retrofits can be a deterrent. 

 

Federal support to help finance energy efficiency retrofits can help owners get over that initial “hump” and spur a dramatic increase in employment.  

 

The U.S. housing sector presents significant opportunities to reduce energy consumption overall. According to the National Renewable Energy Laboratory, energy efficient improvements could reduce electricity consumption in single family homes by as much as 21%.

 

Bipartisan legislation introduced in Congress in 2020 (The HOPE for HOMES Act)  would create rebates for homeowners to invest in energy efficiency improvements, including insulation, HVAC system upgrades and others; and would provide grants to train contractors in making energy efficiency improvements.

 

Tax incentives are another useful way for the federal government to help building owners finance the upfront costs of energy efficient upgrades. In recent years, Congress has enacted and extended a number of tax incentives for energy efficient buildings. Unfortunately, Congress has allowed many of these incentives to expire, or has extended them  for a very short periods of time; this lack of certainty has made them less effective than they could be.

 

Congress can provide an immediate boost to the sustainable building sector—and reduce energy consumption—by renewing these tax incentives. Just as critical as the incentives themselves is passing long-term or permanent extensions so that businesses, homeowners and consumers have the certainty they need. Congress also should ensure that nonprofit and state and local government building owners can access the incentives.

RESEARCH

Economic and Environmental Impacts of E-QUIP 

ACEEE analyzed the economic and environmental impacts of the Energy Efficient Qualified Improvement Property (E-QUIP) proposal, which would allow accelerated tax depreciation for energy-efficient investments in commercial and multifamily buildings. The results: $15 billion saved in energy bills, eliminating CO2 emissions equivalent to the tailpipe emissions of 22 million vehicles for a year, and a net increase of 130,000 job-years (total years of employment).

Policy Ideas

Energy Efficient Public Buildings Act (H.R.1993 — 117th Congress (2021-2022))

Directs the Secretary of Energy to provide grants for energy improvements to certain public buildings, and for other purposes.

E-QUIP Act (H.R.8930)

A bill to amend the Internal Revenue Code of 1986 to allow 10-year straight line depreciation for energy efficient qualified improvement property, and for other purposes.

Mechanical Insulation Incentives (H.R. 5166 in 116th Congress)

Amends the Internal Revenue Code of 1986 to provide a credit for the labor costs of installing mechanical insulation property. Also included in H.R. 848.

Open Back Better Act of 2021 (H.R.1485)

A bill to provide additional funds for Federal and State facility energy resiliency programs.

To provide Federal financial assistance to States to implement expanded energy savings performance contracting programs (H.R. 2267)