Also, the ESIC Act’s protocol for establishing more stringent energy codes seems reasonable in that additional powers given to the Secretary of Energy to set targets come with checks and balances, such as the requirement to conduct rulemakings. This helps explain why the ESIC Act has the support of more than 250 organizations, including the U.S. Chamber of Commerce and numerous environmental groups.
In addition to the ESIC Act, there are building energy-efficiency tax incentives in effect that will expire at the end of 2013 if not renewed by Congress. Two such incentives are the homeowner energy-efficiency tax credit (IRC Sec. 25C) and Commercial Building Tax Deduction (IRC Sec. 179D), which I blogged about earlier this year.
The Residential Energy-Efficiency (25C) Tax Credit provides up to a $500 credit to homeowners making qualified energyefficient upgrades. Enacted as part of the Energy Policy Act of 2005, this tax credit has been successful in providing economic and energy-related benefits to U.S. consumers and small businesses. According to Washington-based Internal Revenue Service data, in 2009, American taxpayers reported spending $25.1 billion on energy-efficiency improvements associated with the credit, of which $5.172 billion were allowed as realized 25C tax credits. Additionally, the credit helped sustain 278,610 private-sector jobs in the U.S. economy (of which 135,540 were in the construction industry), as well as approximately $13.2 billion in wages and $7.5 billion in net business income, according to a study by the National Association of Home Builders, Washington.
In the last Congress, Reps. Jim Gerlach (R-Pa.) and Richard Neal (D-Mass.) introduced the Home Energy Savings Act, H.R. 6398, which would have made 25C permanent and raised the existing formula— 10 percent of the cost of improvements up to $500—to a new maximum of $1,000. It also would enhance the credit by allowing labor costs for exterior improvements to qualify for the credit; only labor costs for interior improvements currently qualify.
The Home Energy Savings Act has not been introduced in this Congress because the Senate Finance and House Ways and Means committees are attempting to write comprehensive tax-reform bills. However, an April 25, 2013, Senate Finance Committee white paper concerning energy-related options for tax-reform lists H.R. 6398 as one of two residential options. And, for commercial properties, it also lists making permanent Sec. 179D, the Commercial Building Tax Deduction.