Buildings for the 21st Century Act would expand tax break for green construction

As Congress debates energy policy, energy efficiency must be a key component in America’s energy policy solutions.

Last Wednesday, the House Committee on Ways and Means passed a tax package that would redirect $16 billion in tax preferences and incentives to expand energy conservation efforts and increase renewable energy production. This is a dramatic new direction for United States energy policy — and it will set us on a course to limit our dependence on foreign energy and it moves our nation toward a more innovative, conservation-minded approach to energy.

The facts are clear: Energy efficiency and conservation should remain the primary goals of Congress’s efforts to reform energy policy.

These goals are essential to enhance our nation’s security. Unless we begin to reduce energy consumption, we will always be reliant on foreign sources of fuel, no matter how much we invest in new and experimental sources of alternative energy.

These goals are cost-effective — every dollar invested in the Environmental Protection Agency’s Energy Star Program leverages $75 in energy cost savings and $15 of investment in new efficiency technologies. And, this benefit is not restricted by geography.

Every single American industry, from the auto industry to appliance manufactures to commercial builders, can take steps to improve the energy efficiency of their products.

No industry can make a bigger difference to help America meet its future energy needs than building construction. According to the Energy Information Administration, buildings account for 39 percent of total U.S. energy consumption and 71 percent of total U.S. electricity consumption.

In addition, buildings account for more than 53 percent of America’s natural gas usage. While a great deal of attention is already paid to our addiction to foreign oil, we must also be cognizant of our rapidly increasing reliance on imported natural gas. If current rates continue, it is likely that by 2015 the United States will be importing over 25 percent of the natural gas we need to meet demand.

With more than 300 billion square feet of real estate currently in the United States, the building industry can play an important role in reducing our overall energy consumption.

The sooner we change our building techniques, the greater the reduction in our energy consumption. Between 2007 and 2035, 150 billion square feet of the current building inventory will be remodeled and another 150 billion square feet will be newly constructed. Since buildings have an average lifespan of 75 years, the investments we make now will pay substantial dividends long into the future.

We must take advantage of this moment to ensure that the next generation of buildings is constructed to the highest efficiency standards.

Congress should set aggressive standards for energy efficiency in federal buildings, expand educational opportunities for a new generation of architects and engineers to become familiar with the principles of sustainable design, and continue to offer tax incentives that encourage energy efficient building.

Encouraging the building of energy efficient buildings is one of my top priorities. Earlier this year, Rep. Brian Baird (D-Wash.) and I introduced the Buildings for the 21st Century Act (H.R. 539). Our plan expands and extends the existing tax deduction for energy efficient commercial buildings.

From my seat on the Ways and Means Committee, I pushed for this proposal to be included in the energy package recently passed out of committee. I am pleased that committee chairmen Charles Rangel (D-N.Y.) and Richard Neal (D-Mass.) agreed to extend the existing tax deduction for energy efficient commercial buildings for five years.

This incentive provides a deduction of $1.80 per square foot to owners of new or existing buildings who make energy efficiency improvements that reduce the building’s total energy and power use by 50 percent or more when compared with a specific industry standard. The tax deduction also makes available an incentive of $0.60 per square foot to building owners who make improvements to individual lighting, building envelope, or heating and cooling systems that meet target levels of energy savings.

America’s greatest energy resource is the ingenuity and innovation that drives technology improvements including greater energy efficiency. While oil wells may eventually run dry, our nation will never lack for innovation. That’s why energy efficiency investments must be the cornerstone of our national energy strategy.

Schwartz is a member of the House Budget and Ways and Means committees.

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