On December 18, the Alliance to Save Energy and 30 other organizations sent a letter to the Senate Finance Committee and the House Ways and Means Committee urging Congress to extend critical energy efficiency tax incentives that are currently set to expire on December 31, 2013.
December 18, 2013
The Honorable Chairman David Camp
United States House of Representatives
341 Cannon House Office Building
Washington, DC 20515
The Honorable Ranking Member Sander Levin
United States House of Representatives
1236 Longworth House Office Building
Washington, DC 20515
Dear Chairman Camp and Congressman Levin:
On behalf of a coalition of energy efficiency organizations, small and large businesses, trade associations, and public interest groups, the undersigned urge you to extend critical energy efficiency tax incentives that are currently set to expire on December 31, 2013.
There is a growing, bi-partisan, and nation-wide commitment to a goal of doubling U.S. energy productivity by 2030. Increased energy productivity will enable us to do more as a country while using less energy. A study commissioned by the Alliance to Save Energy found that doubling U.S. energy productivity would boost GDP by 20%; save the Nation $327 billion annually in avoided energy costs while creating more than 1 million jobs; and reduce our oil imports by more than $100 billion.
Energy efficiency tax credits are a key policy for helping to achieve this goal, according to the Alliance to Save Energy’s Commission on National Energy Efficiency Policy. And, like virtually all energy efficiency policies, tax credits for energy efficiency have a history of success and bipartisan support. Efficiency upgrades have proved to be an effective means to help consumers overcome the upfront costs associated with otherwise cost-effective efficiency improvements. Existing credits have proved popular and the extension of these tax credits will advance our nation's energy productivity.
Specifically, we ask that Congress extend the tax incentives listed below:
Section 25C Non-Business Energy Property Credit – The Non-Business Energy Property Credit helps homeowners improve the energy efficiency of their homes. This credit benefits consumers directly by helping to defray the upfront costs of residential efficiency retrofits, helping to create domestic jobs while saving homeowners money on their energy bills. The improvements eligible for this tax credit include upgrades to building components like insulation, windows, and roofs as well as equipment like air conditioners, furnaces and water heaters. The 25C credit is extremely popular and has driven demand for energy efficient products and building materials while supporting the employment of local contractors and builders during the economic downturn.
- Section 179D Commercial Building Tax Deduction – The Commercial Building Tax Deduction motivates private building owners and public building designers to reduce energy use in commercial buildings. Section 179D allows for cost recovery of energy efficient windows, roofs, lighting, and heating and cooling systems meeting certain energy savings performance targets. Without section 179D, the same building equipment would be depreciated over 39 years (business property) or 27.5 years (residential property). The deduction allows for accelerated depreciation of high performance equipment that achieves significant energy savings. With over 4.8 million commercial and other non-residential buildings in the United States, spending a total of more than $100 billion every year on energy costs, energy efficient new construction and retrofits can result in significant savings for U.S. businesses.
- Section 45L Efficient New Homes Tax Credit – The New Energy Efficient Home Credit promotes the construction of highly-efficient new homes that create jobs in America’s housing industry while saving homeowners money on their energy bills. This performance-based tax credit has been successful in transforming the new homes market and has effectively lowered energy costs for American homeowners, putting more money into local economies and making homeownership more affordable. It is critical that Congress extend this credit to continue the increase in the market share of new efficient homes as the new home construction market rebounds from the recession.
- Section 45M Efficient Appliances Manufacturer Tax Credit – The Efficient Appliances Manufacturer Tax Credit promotes the manufacture of high-efficiency appliances, including washers and refrigerators. Extending the incentive would not only save homeowners money on their energy bills, but also encourage domestic manufacturing of high-efficiency appliances.
- Section 132(f) Transportation Fringe Benefits – Originally enacted in 2009 as part of bipartisan legislation, this credit helped cut commuting costs by establishing parity with the tax-free parking benefits available to commuters who drive. This important provision has eased the burden of commuting costs on American families and reduced stress and congestion on our roads and highways. Parity expired at the end of 2011, and the resulting decrease of the transit benefit from $230 per month to $125 per month will fall hardest on transit riders with the longest commutes. More than 2.7 million Americans nationwide utilized the transit benefit, with over one third of those users spending more than $125 per month. This benefit impacts employers and employees immediately and reduces their tax liability, resulting in sound fiscal savings for both.
We are aware that comprehensive tax code reform remains a possibility in this Congress, and we are supportive of those efforts. In the meantime, however, we urge you to ensure that the important energy efficiency tax credits – which are a key to reaching the goal of doubling U.S. energy productivity – do not expire. Extending these credits will ensure that we do more with less (energy) to the betterment of our economy, national security and environment.
Acting now, rather than waiting for broader reform, is critical and we urge you to do so by extending the energy efficiency tax incentives for America’s families and businesses.
Alliance to Save Energy
Alliance for Industrial Efficiency
American Institute of Architects
Big Ass Fans
Center for Environmental Innovation in Roofing
Conservation Services Group
Enterprise Community Partners
Environmental and Energy Study Institute
Habitat for Humanity International
Illuminating Engineering Society of North America
Institute for Market Transformation
Interfaith Power & Light
Manufactured Housing Institute
National Association of State Energy Officials
National Lumber and Building Material Dealers Association
Seattle City Light
Sheet Metal and Air Conditioning Contractors' National Association
Southern Alliance for Clean Energy
The Stella Group, Ltd.
Vinyl Siding Institute
Window and Door Manufacturers Association
cc: Members of the House Ways and Means Committee
cc: Members of the Senate Finance Committee