Congress Extends Energy Tax Incentives through Economic Recovery Package
October 7, 2008
With the passage of the
economic recovery package by Congress last week, banks aren’t the only ones
relieved; proponents of energy efficiency efforts are as well.
The American Society of Heating, Refrigerating and Air-Conditioning Engineers
(ASHRAE) commends Congress on including in the package provisions for the
extension of expired and expiring tax incentives for renewable energy,
energy-efficient building upgrades, and appliance and equipment purchases.
“These energy provisions are essential to realizing ASHRAE’s goal of reaching
net-zero-energy buildings,” says Bill Harrison, ASHRAE president. “But more
importantly, they are essential for the energy independence of our nation.
While the banking industry may be visibly suffering now due to these economic
times, we will all suffer if we don’t find ways to take advantage of
alternative energy sources and make our buildings more efficient.”
Though several attempts were made during the 110th Congress to extend these
credits and incentives, those attempts failed due to disagreement over funding
One key provision in the legislation is the extension of the Commercial
Building Tax Deduction (CBTD) through 2013. This allows building owners to
claim a deduction of up to $1.80 per square foot for HVAC, lighting or envelope
upgrades resulting in 50% savings over ANSI/ASHRAE/IESNA Standard 90.1-2001.
This five-year extension allows for the planning schedules often needed in
design and construction, whereas the provision previously was only certain for
shorter periods, affecting its usefulness.
The legislation additionally creates new credits for combined heat and power
system property, small wind energy property, and geothermal heat pump systems
Other energy provisions in
the legislation include:
the Renewable Energy Production Credit for wind to 2010, biomass, geothermal,
solar and hydro to 2011, and adds a marine/tidal credit through 2012.
credits for solar energy property, fuel cell property and microturbines through
provisions for Energy Conservation Bonds issued by states or localities to
conduct energy conservation projects.
residential tax credits for energy saving appliances, energy efficient homes,
and on-site renewables.
accelerated depreciation period for smart meters and smart grid systems,
encouraging investment in these systems.
program providing tax-exempt bond designation to designated green building and
sustainable design projects on brownfields.
expired business research credit through 2009.