Category: Energy

Policymakers and Industry Advocates Focus on ENERGY STAR Support, Clean Energy Tax Credits

Posted on by abigail_grenadier

As Republican lawmakers released a sweeping tax package this week and considered federal spending for the next fiscal year, The Real Estate Roundtable (RER) and industry allies continued to advocate for the ENERGY STAR program amid efforts to cut Inflation Reduction Act (IRA) clean energy credits.

Roundtable Advocacy

  • This week, RER along with eleven industry partners submitted a letter to U.S. Department of Energy (DOE) Secretary Wright reiterating the message of support for ENERGY STAR, and the benefits of the program driving down utility costs, bolstering grid reliability, and supporting U.S. economic competitiveness by helping building owners and managers benchmark performance and cut waste (Letter, May 14) (RW, May 9)
  • In April, RER and 17 industry organizations sent a letter to EPA Administrator Lee Zeldin expressing strong support for the program. (Roundtable Weekly, April 4)
  • In a Washington Post op-ed this week, former EPA Administrator William K. Reilly (1989-1993) described the program as “government at its best,” noting it was never intended as a climate policy tool but rather a cost-saving initiative embraced by businesses, developers, and consumers alike. (Washington Post, May 14)

Hearings This Week

  • EPA Administrator Lee Zeldin testified at Appropriation Committee House and Senate hearings this week regarding the president’s budget, but offered no clarity on ENERGY STAR’s future.
  • Lawmakers on both committees voiced concern over the scope of proposed EPA spending cuts.
  • The chair of the House’s Interior-EPA spending subcommittee Mike Simpson (R-ID) told Zeldin during the hearing, the administration’s proposed 55% EPA budget cut was unlikely to be accepted. (PoliticoPro, May 15)
  • In the Senate, Appropriations Subcommittee on Interior, Environment, and Related Agencies Chair Lisa Murkowski (R-AK) called the FY2026 EPA budget proposal “unserious” and “problematic.” (Sen. Murkowski Remarks, May 15)

IRA Clean Energy Tax Credits

  • The House Ways and Means Committee advanced its reconciliation bill that proposes sweeping changes to the IRA.

  • The bill terminates or phases out most of the clean energy tax credits that were expanded or created in the IRA.
  • Over past few weeks, several Senate and House Republicans have written to leadership expressing their support for maintaining energy incentives that benefit both traditional and renewable energy sectors, and urging a more selective approach to scaling back the IRA’s tax provisions. (RW, April 25)
  • Ways and Means vice chair Rep. Vern Buchanan (R-FL), a defender of IRA clean energy credits, said in an interview Wednesday he hopes Senate Republicans will make changes to the committee’s rollback of incentives. (Politico, May 14)

The Roundtable continues to engage lawmakers to ensure balanced, effective energy policies that support industry and economic growth.

Trump Administration Proposes Possible Elimination of ENERGY STAR Program

Posted on by abigail_grenadier

The Trump administration’s fiscal year 2026 budget released last week proposes to eliminate funding for ENERGY STAR—a voluntary, market-based program currently run by the Environmental Protection Agency (EPA) widely used by commercial real estate to track energy usage and reduce utility costs. (CNN, May 6)

Why It Matters

  • Reports also emerged this week of staff reorganization plans announced at EPA that would eliminate the agency’s larger department that currently houses ENERGY STAR. (Washington Post, May 6) (The Hill, May 6)
  • Administration officials say the planned restructuring is part of a broader effort to streamline federal agencies and cut discretionary spending. (LA Times, May 6)
  • Real estate assets that do more with less energy—as quantified, monetized, and recognized through Portfolio Manager and other ENERGY STAR offerings—are critical to achieving EPA’s pillars to “power the great American comeback.” (Roundtable Weekly, April 4)
  • ENERGY STAR is commercial real estate’s most relied-upon public-private partnership with the federal government It provides the industry standard for benchmarking energy use, informing smart capital investments, and supporting lower operational costs with less regulatory burden.
  • Over 330,000 buildings, encompassing nearly 25% of U.S. commercial floor space, have utilized this platform to make informed decisions on energy investments and capital projects. (RER Letter, April 4)  (UrbanLand, May 8)

CRE Industry Supports ENERGY STAR

  • In response to the proposed cuts, RER President and CEO Jeffrey DeBoer commented on Tuesday:
  • “The highly successful ENERGY STAR program is integral to the U.S. real estate industry. Its software is embedded in the fabric of how profitable, energy efficient buildings are run and managed in all markets across the nation. ENERGY STAR provides the key tools for families and business to save money on their utility bills. Owners and developers rely on ENERGY STAR to attract investment capital so U.S. building infrastructure can compete with the best real estate assets in the world. 
  • “ENERGY STAR also provides the best measure to reduce energy use so buildings put less strain on the grid – to free up the electricity we need to lead the world in artificial intelligence, support innovations in the crypto asset industry, and bring back manufacturing to America.” (UrbanLand, May 8)
  • “Only the federal government has all the data, talent, lab research, and other expertise necessary to run all of the facets of ENERGY STAR,” DeBoer continued. (RER Statement, May 7)
  • In April, RER and 17 industry organizations sent a letter to EPA Administrator Lee Zeldin expressing strong support for the program.
  • The coalition urged the administration to maintain ENERGY STAR’s voluntary framework, which enhances electric grid reliability, supports emissions reductions, and has saved consumers and businesses over $500 billion in energy costs since its inception. (Roundtable Weekly, April 4)

What’s Next

  • Congressional appropriators will determine the program’s future in the coming months as they review the president’s proposed budget.
  • ENERGY STAR has long received bipartisan support—including from moderate Republicans who cite its role in lowering energy costs and improving the efficiency of household appliances. (Washington Post, May 6)

RER looks forward to collaborating with the Trump Administration, Congress, the EPA, the Department of Energy, and our allies in the product manufacturing sector to transition the landmark ENERGY STAR public-private partnership as it evolves to support a new generation of cutting-edge buildings, plants, and consumer products.

Trump Executive Orders Push Energy Dominance Agenda

Posted on by abigail_grenadier

President Trump issued executive orders this week for a policy agenda to develop domestic energy supplies, ensure grid reliability, and meet increased electricity demands driven by artificial intelligence (AI).  (AP News, April 8)

Grid Reliability Executive Order (EO)

  • It states that America’s leadership in technological innovation “depends on a reliable supply of energy from all electric generation sources, particularly those secure, redundant fuel supplies that are capable of extended operations.” (Politico, April 8)
  • Building efficiency measures that yield energy savings are also key to relieving electricity grid constraints to accommodate more energy users. RER and a broad coalition of real estate organizations urged heightened focus on efficiency programs by voicing strong support for ENERGY STAR in a recent letter to EPA Administrator Lee Zeldin. (RW, April 4)

State Overreach EO

  • The EO on “Protecting American Energy from State Overreach” reflects the administration’s view that “American energy dominance is threatened when State and local governments seek to regulate energy beyond their constitutional or statutory authorities.”  (Axios, April 9)
  • Governors committed to reducing the use of fossil fuels and combat climate change within their borders said they were not “intimidate[d]” by the Trump order, signaling likely litigation. (E&E News, April 9; Reuters, April 9)
  • In February, RER submitted a letter to Congress requesting oversight of federal DOE grants that induce states and localities to require all-electric buildings and zero emissions “targets,” through onerous Building Performance Standards (BPS). (RW, Feb. 28)
  • RER’s peer reviewed 20-point policy guide for fair BPS mandates emphasizes that states and localities receiving federal grants should not levy fines on buildings that meet US-EPA and US-DOE high performance industry leadership standards. (RW, Oct. 11)

Tariffs and Energy

  • While the administration’s recent executive orders could bolster grid reliability, the potential for broad tariffs may introduce new costs and complexities undermining energy affordability and infrastructure investment. (PoliticoPro, April 8)
  • Tariffs on critical grid components could exacerbate supply chain shortages and drive up electricity prices. (CNet, April 4)
  • On Tuesday, U.S. Senators Bill Cassidy (R-LA) and Lindsey Graham (R-SC) introduced the latest version of the Foreign Pollution Fee Act (FPFA), a carbon tariff aimed at penalizing imported goods manufactured with higher CO2 emissions than domestic alternatives. (E&E News, April 9)  (Press Release, April 8)
  • Prospects for imminent passage of the FPFA are remote. Yet, the bill signals some interest by Republican Senators to tie climate policy to tariff policy where overseas manufacturers produce aluminum, cement, iron, steel, and glass with higher carbon emissions compared to like-kind U.S. manufactured products. (American Action Forum, April 8)  
  • RER submitted comments on the FPFA in January, raising concerns regarding the impact of a carbon tariff on affordable housing construction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing. (RW, Feb. 7)

RER will continue engaging with policymakers to ensure federal actions promote reliable, affordable energy without unintended economic repercussions.

Real Estate Coalition Urges Support for ENERGY STAR Program

Posted on by Trey Jackson

The Real Estate Roundtable (RER) and industry partners voiced strong support for Environmental Protection Agency’s (EPA) ENERGY STAR program in a letter to Administrator Lee Zeldin this week—urging continued support for the voluntary, market-driven platform that underpins building efficiency, grid reliability, and energy cost savings. (Letter)

Why It Matters

  • Commercial real estate relies more on ENERGY STAR than any other voluntary federal public-private partnership. It provides CRE’s standard tool to track and reduce building energy use—supporting lower utility bills, smart cap ex investments, and reduced regulatory red tape. (Letter)
  • “Real estate assets that do more with less energy – as quantified, monetized, and recognized though Portfolio Manager and other ENERGY STAR offerings – are critical to achieve EPA’s pillars to “power the great American comeback,” the letter stated.

Facts and Stats

  • More than 330,000 buildings—representing nearly 25% of U.S. commercial building floor space—utilized EPA’s Portfolio Manager software last year.
  • ENERGY STAR-certified buildings achieve an average of 35% less energy usage compared to similar non-certified buildings.
  • The program has saved businesses and families nearly $200 billion in utility bills since 1992, including $14 billion in 2024 alone.

Driving the Energy Comeback

The real estate industry letter how ENERGY STAR supports EPA goals to:

  • Restore Energy Dominance and Competitiveness: Helps reduce operating costs, ease grid strain, and boost building global competitiveness.
  • Support Cooperative Federalism: Serves as a unifying national platform across varied state and city energy rules.
  • Lead in AI Innovation: Electricity savings supported by ENERGY STAR, combined with American-made energy of all types, are requisite to meet the massive demands for power we need to lead the world in AI innovation.

Energy Hearings on Capitol Hill

  • Congressional committees held a series of energy-related hearings over the past two weeks, zeroing in on grid reliability, domestic supply, and the mounting electricity demands from artificial intelligence and data infrastructure.

RER remains committed to continued collaboration with EPA to advance the ENERGY STAR program as part of the administration’s ‘all of the above’ energy strategy, and goals to make the grid more resilient and reliable.

Policymakers Sharpen Focus on Grid Reliability

Posted on by Trey Jackson

Recent legislative hearings and administrative initiatives have highlighted the critical need for a resilient and affordable electricity supply.​

The Big Picture

  • EPA Administrator Lee Zeldin’s initiative for “Powering the Great American Comeback,” and DOE Secretary Chris Wright’s 9-point plan for US “energy dominance,” outlined agency strategies emphasizing permitting reform, strengthening grid reliability, expanding U.S. energy production to fuel economic growth, and position the U.S. as a global leader in AI and advanced energy technologies.
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Jan. 25)

Why It Matters

  • Policymakers and industry leaders are debating how to balance investment in renewable energy, transmission infrastructure, and traditional baseload generation sources to ensure stable electricity supply. (E&E News, Feb. 26)
  • During this week’s joint address to Congress, President Trump emphasized the administration’s focus on reducing energy costs: “A major focus of our fight to defeat inflation is rapidly reducing the cost of energy … That’s why, on my first day in office, I declared a national energy emergency… It’s called drill, baby, drill.”
  • In a new report from The Center for Strategic & International Studies warns that while AI is digital, its biggest hurdle is physical infrastructure. The report explores using President Trump’s energy “emergency” declaration to fast-track permitting and urges a stronger DOE role in accelerating nuclear projects. (Axios, March 5)

Congressional Hearing

  • Industry experts argued that regulatory hurdles are slowing energy infrastructure projects, creating a gap between federal energy goals and grid capacity. (Latitude Media, March 5)

Clean Energy & Economic Impact

  • The American Clean Power Association (ACP) reports that while the Inflation Reduction Act (IRA) has boosted clean energy investment, uncertainty over efforts to cut tax credits raises concerns about long-term project financing.
  • In 2024, U.S. developers added 48 gigawatts of new utility-scale solar, storage, and wind capacity—a 33% increase from the previous year. (ACP Report, March 5)
  • The clean energy industry argues that wind and solar projects can be built faster than natural gas and nuclear, making them essential for stabilizing the grid. (E&E News, Feb.26)
  • 79% of operational clean power capacity is now located in Republican-held districts, with GOP districts also home to 77% of new clean energy additions last year. (PoliticoPro, March 5)
  • North America’s data center sector doubled its construction supply in 2024 to a record 6,350.1 megawatts (MW), underscoring the increasing power demands of AI-driven computing, according to CBRE’s latest North American Data Center Trend Report.  (ConnectCRE, March 4)

The Real Estate Roundtable will continue working with the administration to advance policies that streamline energy project approvals, strengthen grid resilience, ensuring a stable, reliable power supply to fuel economic growth and innovation.

RER to Congress: Oversee Federal Grants for Onerous Local Building Performance Laws

Posted on by Trey Jackson
Department of Energy building in Washington, DC

The Real Estate Roundtable sent a letter on Wednesday asking Congress to oversee nearly a quarter billion dollars in federal grants, used to back city and state efforts setting onerous energy and emissions regulations on buildings.

Congressional Hearing

  • The oversight and investigations arm of the U.S. House Energy and Commerce Committee held a hearing Wednesday examining Biden-era energy and environmental program funding.
  • BPS laws are like “EV mandates” for buildings. These state and local mandates aim to set “net zero” emissions targets for owners and tenants to stop using heaters, boilers, stoves and other appliances that run on natural gas — and “electrify” instead.
  • No U.S. agency has the authority to require private sector building electrification. The U.S. Department of Energy (DOE) should not make an “end run” around this limit on its authority by issuing grants for BPS jurisdictions to accomplish indirectly what federal regulators can’t do directly, RER explained.
  • RER’s letter requested reasonable “strings attached” to the DOE grants. BPS cities and states taking federal taxpayer dollars should be required to study fully the housing affordability, grid capacity, and market impacts of their “net zero” laws.
  • RER has released a comprehensive, peer-reviewed 20-point policy guide for fair BPS mandates. The letter urged Congress to investigate whether jurisdictions receiving federal grants are considering issues raised in RER’s guide to achieve balanced building emissions regulations. 

CRE Supports EPA ENERGY STAR

  • These programs give building owners and developers standardized tools to monetize and forecast “massive energy savings,” help reduce strain on the power grid, and attract global capital to U.S. real estate.
  • “At minimum, any state or locality that received federal grants to develop onerous BPS laws should not levy fines on buildings participating in federal partnership programs,” RER wrote.
  • RER’s position advances the priorities of its Sustainability Policy Advisory Committee (SPAC), chaired by Anthony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.). SPAC leads the organization’s energy advocacy agenda with a message centered on saving money, delivering profits, enhancing grid reliability, and attracting global investments to U.S. real estate.
  • “Building energy, water, and waste performance drives savings, results, and delivers a healthier work environment,” said Malkin recently in a discussion with Paul Donofrio, Vice Chairman of Bank of America and Co-Chair of its Responsible Growth Council. (BofA Webinar, Feb. 18) 

RER will continue to work with the Trump administration to identify opportunities for cost savings while highlighting effective government programs that create American jobs, grow the economy, and optimize America’s energy independence.  

Incoming Trump Administration Prepares Energy Policy Shift

Posted on by Trey Jackson

This week’s confirmation hearings shed light on the Trump Administration’s ambitious energy agenda, including plans to expand American energy production, streamline project approvals, and explore a carbon tariff on imports. (PoliticoPro, Jan. 16)

“All of the Above” Energy Policy

  • President-elect Trump has prioritized “drill, baby, drill” as a cornerstone of his agenda, emphasizing energy independence and dominance through increased domestic oil and gas production.
  • Chris Wright, the Energy Secretary nominee, told the Senate Energy Committee on Wednesday that he would use the role to “unleash American energy at home and abroad” if confirmed. (Reuters, Jan. 15)
  • Wright said in his opening statement that he would focus on three objectives: removing barriers for energy projects, accelerating innovation by the national laboratories, and advancing U.S. energy domestically and abroad. (Roll Call, Jan. 16)
  • North Dakota Governor Doug Burgum, the Interior Secretary nominee, said at his Thursday confirmation hearing that the U.S. must expand domestic energy production and electricity generation to meet growing demand, particularly from AI technologies. (Politico, Jan. 16 | Roll Call, Jan. 16 )
  • Burgum supports an “all-of-the-above” approach that would utilize renewables and fossil fuels.  Trump has also tapped Burgum to lead a White House-based energy council that would coordinate policy across the federal government. (Politico, Jan. 9)
  • Former Representative Lee Zeldin, the nominee for EPA Administrator, said at his Thursday hearing he would work in a bipartisan manner with career staff to fulfill the agency’s mission. (PoliticoPro, Jan. 16 | The Hill, Jan. 16)
  • Zeldin vowed to address climate change without “suffocating the economy,” and committed to private sector collaboration to “promote common sense, smart regulation.” (NBC News, Jan. 16 | Washington Post, Jan. 16)

Carbon Tariff Proposal

  • During his Thursday confirmation hearing, Treasury Secretary nominee Scott Bessent (see Policy Landscape story above) expressed interest in a carbon tariff on imports, suggesting it could be part of a broader Trump administration strategy to raise revenue, counter unfair trade practices, and boost negotiating leverage.
  • Bessent indicated the potential for such measures to align with the administration’s broader trade and economic goals. (PoliticoPro, Jan. 16)
  • Recently, Sen. Bill Cassidy (R-LA) proposed a bill, the “Foreign Pollution Fee Act” that would impose a “foreign pollution fee” on imported carbon-intensive products – including construction materials. (E&E News, Dec. 12)
  • The bill’s co-sponsor, Sen. Lindsey Graham (R-SC), spoke about the bill at Bessent’s hearing. “If you want to clean up the environment, a carbon fee seems to be a good way to do it, to punish China and India for bad carbon practices,” Graham said. (Politico, Jan. 16)
  • The Roundtable submitted comments today on the Foreign Pollution Fee Act. The letter raises concerns regarding the impact of a carbon tariff on affordable housing constriction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing.

Other Energy News This Week

  • President Biden issues executive order to advance U.S. artificial intelligence (AI) infrastructure: President Biden issued an executive order directing agencies to lease federal land for “gigawatt-scale” to support new data center construction. (AP News, WH Press Release, Jan. 14)
  • 179D energy efficiency tax deduction: The Energy Department (DOE) launched the 179D Portal, offering tools for new commercial construction and retrofits to estimate energy savings and qualify for potential federal tax incentives. (DOE Press Release, Jan. 14)
  • California wild fires raise electricity costs: The Los Angeles wildfires, which caused over $250 billion in damages and severely impacted the region’s electrical infrastructure, have driven a nearly 50% increase in California’s residential electricity rates since 2019, raising concerns about the fairness of passing these wildfire-related costs onto customers. (Politico, Jan. 15)
  • Maryland building emissions standards lawsuit: A coalition of trade organizations filed a federal lawsuit arguing that the Maryland Building Energy Performance Standards (BEPS) is illegal because it is “pre-empted” due to its conflict with federal laws. The Maryland law mandates large buildings to reduce greenhouse gas emissions by 20% within five years and achieve net-zero emissions by 2040. The lawsuit claims the rules exacerbate the housing crisis, strain the power grid, and violate consumer choice. (Baltimore Banner, Jan. 14 | (Baltimore Sun, Jan. 16)

Electric Grid Strain: CRE’s Role in Addressing Energy Challenges

Posted on by Trey Jackson

Demands for artificial intelligence (AI), advanced manufacturing, electric vehicles, and building electrification are straining the U.S. electric grid—creating challenges and opportunities for commercial real estate (CRE). (Deloitte, Dec. 9)

Why it Matters

  • The grid is at a “tipping point.” Heightened demands for power by consumers, businesses, and government are posing significant risks to energy reliability and driving data center construction to meet the needs. (PoliticoPro, Dec. 18)
  • The organization authorized by Congress to assess grid capacity highlighted last month the “critical reliability challenges” needed to satisfy “escalating energy growth,” as retiring power plants age-out of service. The report also noted the need to accelerate construction of transmission projects to bring electricity to the nation’s cities and suburbs. (N. American Electric Reliability Corp., 2024 Assessment.)
  • President Joe Biden is expected to issue an executive order as soon as today to boost the construction of data centers on federal land to support AI, while also aiming to increase geothermal and nuclear energy production to power them. (PoliticoPro, Jan. 9)
  • Data center construction is surging to meet demand with site selection largely driven by power availability. Microsoft and Meta recently announced billions of data center investments. (E&E News, Jan. 10 | CBRE, Aug. 2024)
  • The Department of Energy (DOE) estimates data centers could consume up to 12% of U.S. electricity by 2028, largely attributed to demand from cloud and AI providers. (DOE News Release, Dec. 20)
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11)

Bipartisan House Report on AI

  • Policymakers and industry leaders are focusing more than ever on solutions to expand power generation and modernize the grid.
  • The Bipartisan House Task Force on AI released a report last month finding that AI’s critical role in U.S. economic and national security interests hinges on a robust power grid. (House AI Report, December 2024).
  • Recommendations from the Bipartisan House AI Task Force report include:
    • Develop metrics and standards to measure energy use and efficiency.
    • Allocate infrastructure costs to customers who benefit most from upgrades.
    • Use AI to improve energy infrastructure, production, and efficiency.

EPA’s Energy Data Campaign

  • Looking ahead, utilities, policymakers, and data center operators must collaborate to balance priorities such as grid upgrades, renewable energy procurement, water resource management, and equitable cost allocation. (Deloitte, Dec. 9)
  • This week, EPA continued its building energy data campaign to assist real estate owners in coordinating with utilities to access tenant space energy data.
  • To aid both owners, operators, and utility representatives in understanding this issue and potential solutions, EPA has prepared a number of energy data resources that can be found here.

A resilient electric grid is critical to sustaining economic growth. These issues will be featured in discussions at The Roundtable’s State on the Industry meeting on Jan. 22-23.

Senate Hearings Focus on Clean Energy and Tax Policy, Climate Bank

Posted on by Trey Jackson

Senate Finance Committee Chairman Ron Wyden (D-OR)

Senate hearings this week indicate that clean energy financing and tax policies considered in the current Congress might significantly affect commercial real estate. (Tax Notes, April 29)

Senate Finance Focus

  • Senate Finance Committee Chairman Ron Wyden (D-OR), photo above, opened an April 27 hearing by noting how President Biden’s goal of cutting carbon emissions in half by 2030 is driving clean energy policy. Wyden stated, “The reality is, a debate on energy and transportation is largely a debate on tax policy. That puts this committee in the driver’s seat when it comes to job-creating legislation that addresses head-on the existential challenge of the climate crisis.”
  • Sen Wyden also remarked about legislation he introduced last week – the Clean Energy for America Act, which would revamp tax incentives directed at buildings, electricity and transportation. Among other things, the bill would reform the 179D deduction for energy efficient commercial and multifamily buildings – with the value of the incentive increasing as more energy is conserved. (Text of the legislation, one-page summary of the bill and a section-by-section summary.)
  • Committee Ranking Member Sen. Mike Crapo during his opening remarks noted draft legislation that he unveiled the day before with committee member Sheldon Whitehouse (D-RI) – the Energy Sector Innovation Credit (ESIC) Act. ESIC is an incentive that would “target tax credits for innovative clean energy technologies,” Crapo said. (SFC news release).

E-QUIP Accelerated Depreciation

HVAC equipment

  • Separately, a broad coalition of environmental, manufacturing, and real estate groups led by The Roundtable supports the E-QUIP Act (H.R. 2346), which proposes “accelerated depreciation” for high-performance equipment installed in commercial and multifamily buildings. The coalition is urging policymakers to include this measure as part of any “green tax” package that may be folded into larger infrastructure spending legislation. (Roundtable Weekly, April 2)
  • Roundtable President and CEO Jeffrey DeBoer emphasized an important distinction between the energy incentives affecting CRE. “All building owners are intensely focused on operations and technologies to reduce energy consumption. Yet the policy discussions in Washington frequently don’t reflect the reality of these efforts to make commercial real estate properties more sustainable. It is retrofitting the existing building stock, not new construction, where energy savings and policy incentives are most challenging.” DeBoer said.
  • He added, “The 179D incentive fails to reflect the diverse vintage and tenant base in buildings. The E-QUIP incentive accommodates existing buildings by targeting the addition of high-performance, energy saving components. Combining the two incentives would make most sense.” 

National Climate Bank

Senator Chris Val Hollen (D-MD)

  • The Senate Environment and Public Works Climate Subcommittee on April 27 held a “Legislative Hearing on S.283, National Climate Bank Act” focused on how a national climate bank, also known as an “energy accelerator,” would invest in renewable energy technology.
  • Sen. Chris Van Hollen (D-MD), photo above, co-author of S. 283 with Subcommittee Chairman Sen. Ed Markey (D-MA), testified at the hearing, “… we need a National Clean Energy Accelerator … so we can turbocharge private investment, fortify our energy grid, and create millions of clean energy jobs – including in those communities where fossil fuel plants have closed.”
  • Van Hollen’s legislation is supported conceptually by President Biden’s American Jobs Plan, which recommends a $27 billion “accelerator” financing platform to mobilize private investment into building retrofits and other clean energy projects.

  • White House National Economic Council Director Brian Deese recently discussed the creation of a climate bank in an interview with Roundtable President and CEO, Jeffrey DeBoer for The Roundtable’s April 20 Spring Meeting. (Roundtable Weekly, April 23).

Additionally, the White House on April 27 announced policy actions to advance the expansion and modernization of the energy grid. National Climate Advisor Gina McCarthy noted, “After the Texas transmission debacle this winter, no one can doubt the need to invest in our electric grid. The steps that the Departments of Energy and Transportation are taking today, when combined with the grid investments outlined in the American Jobs Plan, will turbocharge the building of major new electricity transmission lines that will generate new jobs and power our economy for years to come.”

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Senate Finance Committee Task Force Proposes Making Tax Deduction for Energy Efficient Buildings (sec. 179D) Permanent

Posted on by Trey Jackson

A bipartisan group of Senate Finance Committee policymakers this week recommended the tax deduction for energy efficient commercial buildings (section 179D) should become a permanent provision in the federal tax code.  Section 179D expired at the end of 2017.  ( BloombergTax , Aug. 13) 

Senate Finance Chairman Chuck Grassley (R-IA), right, and Ranking Member Ron Wyden (D-OR), left, set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.
  • Senate Finance Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.   
  • Three of the task forces released reports on Wednesday, addressing the areas of cost recovery (e.g., sec. 179D) and energy (e.g., sec. 45L credit for energy-efficient new homes).   In addition to recommending permanency for section 179D, the Cost Recovery Temporary Tax Policy Task Force led by Senators Mike Crapo (R-ID) and Ben Cardin (D-MD) noted that further improvements to the provision would accelerate its positive impact.
  • The reports refer to extensive comments from stakeholders, including The Real Estate Roundtable and industry coalitions.  The committee also posted further information about the temporary tax policies that the task forces examined.  
  • The task forces’ “thorough and bipartisan approach will form the foundation of the committee’s work to provide more certainty to temporary tax policy,” Grassley said. “The next step will be to put together a legislative package based on the proposals that the taskforces received, the areas of consensus among the taskforce members and continued bipartisan discussions.” (SFC news release, Aug. 13) 
  • In the House, the Ways and Means Committee on June 20 passed legislation to extend a host of expired and expiring tax credits through 2020, including section 179D.  (Markup of House Tax Legislation and Roundtable Weekly, June 21)  The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301) includes other provisions affecting real estate:  

    •  Credit for construction of new energy efficient homes (sec. 45L)

    •  Credit for energy efficient improvements to existing homes (sec. 25C)

    •  Exclusion of mortgage debt forgiveness (sec. 108(a)(1)(E))

    •  Deductibility of mortgage insurance premiums (sec. 163(h)(3)(E))

    •  New markets tax credit (sec. 45D)  

    •  Empowerment zone tax incentives (sec. 1391-97)

      Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  ( BOMA testimony -March 14, 2018)
    • Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  (BOMA testimony, March 14, 2018) 
    • On a separate track from extenders and 179D is an energy efficiency tax proposal urged by The Roundtable and a broad coalition of real estate and environmental organizations.  The groups urge House and Senate tax writers to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP” – with a 10-year cost recovery period (Coalition E-QUIP Letter, May 8) 
    • Roundtable President and CEO Jeffrey DeBoer stated, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.”  (Roundtable Weekly, May 10) 

    When Congress returns on September 9 from summer recess, additional changes to the Ways and Means extenders bill may be made as it moves to the House floor, and then to the Senate.  However, passage of spending bills to fund the government beyond September 30 are considered must-pass legislation.  Whether an extenders bill can be attached to an FY’20 appropriations bill is uncertain at this time.    

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