Biden Administration Proposal Includes $555 Billion Mix of Senate and House Clean Energy Proposals


The White House’s scaled back $1.75 trillion “framework” infrastructure reconciliation bill includes a $555 billion mix of Senate and House clean energy provisions. (Axios, Oct. 29) 

Why It Matters 

  • Revamped clean energy tax incentives “form the biggest measures to fight climate change in the budget reconciliation bill.” (PoliticoPro and B-Gov, Oct. 28)
  • House Ways and Means Chair Richard Neal (D-MA) and Senate Finance Chairman Ron Wyden (R-OR) said yesterday they had reached agreement on the climate provisions. (PoliticoPro, Oct. 28)
  • The incentives largely reflect the suite of credits and deductions passed Ways and Means last month with Democratic-only support (Roundtable Weekly, Sept. 17). Senate Finance provisions favorable to CRE advanced in May (Roundtable Weekly, May 28) have also been included in the latest House package. 

Clean Energy Tax Provisions 


  • Based on the text and a section-by-section summary of the Build Back Better reconciliation bill, clean energy tax provisions of interest to the U.S. real estate sector include:
    • Extension of the Section 48 Investment Tax Credit to offset some of the expenses of solar properties, combined heat and power systems, and fuel cells – with expansions to cover energy storage, dynamic glass, and “linear” generators;   
    • A revised tax credit for installations of EV charging stations;

    • An elective “direct pay” option allowing entities with little or no tax liability to obtain a payment equal to the value of the credits they would have received if they paid taxes; and

    • Reform of the 179D tax deduction geared toward incentivizing energy efficiency “retrofits” of existing commercial and multifamily buildings.
  • The green energy incentives, however, are subject to new labor rules that will affect taxpayers’ decisions to utilize the benefits. The Build Back Better Act does not require businesses seeking these credits or deductions to pay Davis-Bacon wages or hire registered apprentices on clean energy projects. However, the amount of the incentives can be five times greater for qualifying projects meeting these labor costs compared to those that do not.
  • The Roundtable’s latest Policy Issues Toolkit (“Clean Energy Tax Incentives” fact sheet, p. 25) provides more details on particular incentives and the wage/apprenticeship issues at play in reconciliation talks.
  • A separate climate priority of Progressive Democrats known as the Clean Electricity Performance Program (CEPP) – that would have offered incentives to power companies switching to renewable energy and fining those that “moved slowly from fossil fuels” – was dropped from the reconciliation bill at the urging of Senator Joe Manchin (D-WV). (Roll Call, Oct. 28.) 

CRE’s Role 

John Fish 2021 Suffolk

  • Roundtable Chair John Fish (Chairman and CEO, Suffolk), above, commented on the importance of clean energy measures affecting commercial real estate in an interview published this week with American City Business Journals.
  • Fish emphasized the impact that the built environment has on clean energy. He noted buildings produce 40 percent of all carbon emissions and 36 percent of all energy use. He also commented on the role of older building stock, since 75 percent of all buildings in America average 35 years old or older.

“The building world – the asset class of the buildings themselves – contributes a great deal of influence to the health of our environment. We all support energy efficiency, we all support lowering the carbon footprint. We really feel that the real estate industry, of all industries, has probably one of the biggest impacts on that conversation than anybody else. We welcome the opportunity to be at the table and to have those constructive dialogues,” Fish said. (Business Journals, Oct. 27)

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Policymakers Exploring Alternative Climate Policies for Reconciliation Package

Capitol at night reflective

The White House and congressional Democrats scrambled this week to find alternatives to address climate change within the multitrillion reconciliation framework after Sen. Joe Manchin (D-WV) rejected the proposed Clean Electricity Performance Program (CEPP). The CEPP has been a centerpiece proposal pushed by the Biden Administration to increase U.S. renewable power supplies by de-carbonizing the electricity grid. (Politico and E&E News, Oct. 20)

Clean Energy and CEPP

Sen.  Joe Manchin (D-WV)

  • The CEPP would offer federal Energy Department incentive payments to utilities that meet an annual target of increasing “clean electricity” by four percent per year through 2030. It is intended to reach the Biden Administration’s goal of powering 80% of the electric grid from renewable sources by 2030. (The Hill, Oct. 18)
  • Sen. Manchin (above), chair of the Senate Energy and Natural Resources Committee, stated he opposes the CEPP because the electricity sectors’ transition to clean power sources is already underway. Manchin’s opposition has prompted some Democrats to consider a last-ditch effort to expand the program to include coal and gas power plants that capture carbon emissions, in an effort to attract the key West Virginia Senator’s support. (E&E News, Oct .19 and Politico, Oct. 14)
  • Policymakers are also exploring whether the CEPP could be restructured as a grant program to reward states that increase clean energy output. (Bloomberg, Oct. 20)
  • U.S. Department of Energy Deputy Secretary David Turk addressed alternative approaches to the CEPP during an Oct. 19 Bloomberg Live event.  He said, “There are a variety of discussions right now about how to have different authorities, different funding streams” that support partnerships among states, localities, utilities and the private sector toward the goal of grid de-carbonization. (BGov, Oct 20)

Climate Provisions and CRE

Solar Panels on building

  • Proposals like the CEPP – which aim to boost electricity from solar, wind, and other non-carbon sources – have become a key energy policy priority for CRE. This is particularly the case in local jurisdictions considering “performance standards” that set regulatory limits on “direct” and “indirect” GHG emissions from buildings. (Roundtable Weekly, April 9)
  • An evolving, cleaner grid can also help enable real estate assets to reduce and disclose their so-called “Scope 2” emissions that derive from purchased electricity. The Securities and Exchange Commission (SEC) has indicated it will propose regulations that require public companies (and other entities in its jurisdiction) to report on “material” information regarding GHG emissions to the investor community.  (Roundtable Weekly, Oct. 1 and June 11)
  • If a CEPP-type policy is included in a final reconciliation package, it will be critical for federal data to stay up-to-date and forecast how such a program is driving the grid to become cleaner and less reliant on fossil fuels.
  • The Roundtable’s Sustainability Policy Advisory Committee (SPAC) has thus convened a task force to examine the primary federal data set – known as the Emissions Generation Resource Integrated Database (eGRID) – that reports on the carbon impact of virtually all electric power generated in the U.S.
  • Roundtable members rely on eGRID to inventory their portfolio-wide carbon emissions. eGRID also provides the data that EPA’s Portfolio Manager benchmarking tool uses to determine a specific building’s indirect Scope 2 emissions that derive from electricity consumption.

While the fate of climate policies – and indeed, the entire reconciliation framework – remains unclear, re-vamped provisions of the federal tax code to incentivize clean energy projects appear to have garnered uniform Democratic support. Particulars vary in Senate and House tax proposals, but credits and deductions to incentivize solar installations, energy storage, EV charging stations, and building retrofit projects are on the table in reconciliation discussions. (See The Roundtable’s latest Policy Issues Toolkit, “Clean Energy Tax Incentives,” p. 25)

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