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White House Proposes New Green Buildings Program

February 3, 2011

By Tom Ichniowski
This article originally appeared on Engineering News-Record

The White House has launched a package of proposals—including a new tax credit and grant competition among states and cities—that aim to make commercial buildings 20 percent more energy efficient over 10 years.

The "Better Buildings Initiative," which President Obama announced on February 3 during an appearance at Penn State University, is targeting commercial buildings, which the White House says account for about 20 percent of total U.S. energy consumption.

Obama said the plan could save businesses nearly $40 billion over the next decade in lower energy costs.

The plan has several components, some of which will require congressional action. (See a White House summary of the plan here.)

They include a proposed new tax credit for commercial-building energy upgrades, to replace the current tax deduction for such improvements.

According to a White House statement, the credit would be "more generous" than the deduction and "will encourage building owners and real estate investment trusts to retrofit their properties." The statement did not specify how large the credit would be.

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Andrew Goldberg, the American Institute of Architects' senior director for federal relations, says the current deduction is up to 60 cents per square foot for building upgrades in each of three areas: HVAC systems, shell, and lighting.

Another element of the administration's plan would be a new federal grant competition among states and cities, with funds going to localities that adopt building codes, regulations, and standards that promote energy efficiency in commercial facilities.

Obama said in his speech, "So, if you show us the best ideas to change your game on the ground, we'll show you the money. We will show you the money, states and local governments."

The program would be called "Race to Green," taking off on the Department of Education's existing "Race to the Top" for federal aid for schools.

In addition, the White House says the Small Business Administration is encouraging banks to promote lending for energy-efficiency building upgrade projects.

It says Obama's fiscal 2012 budget proposal, expected to be released in mid-February, will include a request for a Department of Energy pilot loan-guarantee program for energy improvements at hospitals, schools, and commercial facilities.

Design and construction industry groups gave the plan strong marks. AIA's Goldberg says, "This is really a win-win for everybody if you can provide some of these incentives to make buildings more efficient."

The Real Estate Roundtable's president and CEO, Jeffrey D. DeBoer, called the program "an excellent blueprint to re-employ the construction workforce, modernize our built environment and help ensure our nation's energy security."

Stephen E. Sandherr, the Associated General Contractors of America's CEO, said that "encouraging efficiency upgrades will do much more to safeguard our environment and reduce power consumption than any current 'cap and trade' proposal ever would."

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