Tag: ENERGY STAR “NextGen”

Update: What CRE Needs to Know About Energy Policy

Posted on by abigail_grenadier

Major changes to the federal tax code’s clean energy incentives, signed into law on July 4 by the One Big Beautiful Bill (OB3) Act, continue to reshape the future of building-related solar, storage, and energy efficiency investments.

Energy Tax Incentives

  • The OB3 Act accelerates the phase-down of certain tax credits, shortens eligibility timelines, and adds stricter foreign content and control rules. Projects beginning construction in 2025 and beyond should consider:
  • Tax credits that phase out over the next few years (such as the Section 48E “tech neutral” credit for solar, the Section 179D deduction and 45L credit for energy efficiency projects, and the Section 30C credit for EV charging stations);
  • Tax credits that remain available well into the 2030s (such as Section 48E for energy storage); and
  • Permanent options for “full expensing” that can accelerate tax write-offs of energy-related and other building investments, regardless of Section 48E or other tax credit availability

Solar “Beginning of Construction”

Workers on sustainable energy project on rooftop of building
  • The timing of when rooftop solar projects are deemed to “begin construction” is crucial for determining tax credit eligibility under the OB3 Act’s accelerated phase-down of the Section 48E credit.
  • RER, Nareit, NAIOP, and ICSC submitted a joint letter to Treasury on Aug. 8 urging continued reliance on both the Safe Harbor and Physical Work Tests. (Letter, Aug. 8)
  • On Aug. 15, the IRS issued Notice 2025‑42, preserving the Safe Harbor for rooftop solar projects of 1.5 MW or less, which includes most CRE rooftop solar projects and maintains their eligibility for Section 48E credits (for as long as they remain available). (Clean Energy Council, Aug. 18)

EPA ENERGY STAR

  • The status of the ENERGY STAR program should become clearer as part of the “phase 2” reorganization plan of the Environmental Protection Agency (EPA), expected to be implemented by the end of September, as per a White House budget office memo. (EPA press release, July 18) (Politico, July 17).
  • RER and multi-industry coalition partners advocated strongly for Senate and House Appropriations Committee actions this summer, which would provide ample federal spending for ENERGY STAR in FY’2026 starting on Oct. 1. (Roundtable Weekly, July 25).
  • Meanwhile, ENERGY STAR recently certified 131 buildings nationwide under its voluntary new NextGen program, available for highly energy efficient buildings that also opt to reduce emissions and use renewable energy.

California Guidance on Climate Reporting

  • The California Air Resources Board (CARB) released draft guidance this week for companies required to publicly report on climate-related financial risks under state law SB 261.
  • Quantifying and reporting Scope 1, 2, and 3 emissions will not be mandatory in the initial reporting period under California’s law, which applies to companies with annual worldwide revenue greater than $500 million. (PoliticoPro, Sept. 2 | RER’s fact sheet on SB 261 and SB 253, Sept. 2023)
  • The new reporting requirements are expected to start in 2026. Final rules from CARB are expected by December. (ESGToday, Sept. 4)

Housing Affordability and Energy Codes

  • Next Tuesday, Sept. 9, the House subcommittee focused on energy policy will hold a hearing examining the impact of residential building energy codes on housing affordability. (Energy Subcomm. Press release, Sept. 2)
  • According to the memo prepared for the hearing, construction that aligns with the 2021 version of model residential energy codes can add $31,000 to the price of a new home, “and take up to 90 years for a home buyer to recoup the payback value.”
  • Witnesses at the hearing include representatives from the National Association of Home Builders (NAHB) and the natural gas utility serving the Washington, D.C. metro area.

RER will continue advocating to the Trump administration and Congress for clear, workable policies that support long-term real estate energy investments.

The Post-Election Energy Landscape for CRE

Posted on by Trey Jackson
Green foreground with buildings in background

The 2024 election results signal a return to energy policies supported by President-elect Trump and a shift from Biden era climate programs. For the commercial real estate (CRE) industry, these changes present opportunities to emphasize the “business case” for high performance, energy efficient buildings.

Anticipated Energy Policy Shifts

  • De-Regulation: Former Congressman Lee Zeldin (R-NY), the pick to lead the EPA, remarked on “the opportunity to roll back regulations” on power plant emissions, abolish fees on oil and gas development, and lift rules that drive automakers to manufacture electric vehicles. (The Washington Post, Nov. 19)
  • Climate Disclosures: The SEC will likely withdraw its controversial rule for public companies to report climate-related financial risks in 10-K forms. (Bloomberg, Nov. 7) Companies may still need to report and disclose emissions under state laws like those in California (if they survive litigation).
  • Clean Energy Tax Incentives: The incoming administration has vowed to dismantle the Inflation Reduction Act (IRA) that provides credits and deductions for solar projects, battery storage, EV charging stations, and energy efficient buildings. However, many clean energy projects benefit Red States and House Speaker Mike Johnson (R-LA) said he intends to use “a scalpel not a sledgehammer” in reviewing the IRA in light of Republican support. (POLITICO, Sept 18).
  • City, State Grants: Federal funding will likely be eliminated to support city and state efforts to enact building performance standards (BPS). (Roundtable Weekly, Sept 6) Localities may continue to adopt these laws imposing energy use and emissions limits on buildings even without federal support, and The Roundtable will continue to urge policymakers to follow our 20-Point Guide for fair and reasonable BPS laws.
  • Grid Reliability: Given the increased demands on the electric grid from AI, bipartisan bills to streamline the federal permitting process to approve interstate transmission lines – carrying electricity produced in rural areas and delivering it to cities long distances away – could finally become a priority. (Roundtable Weekly, Oct. 25)

The “Business Case” for Energy Efficiency

Department of Energy building in Washington, DC
  • By emphasizing the economic benefits of energy efficient buildings, the industry can remain resilient and forward-looking amid “policy volatility” arising from the power changes in Washington.
  • Energy efficient buildings improve our economy. They create jobs for American workers, enhance U.S. energy independence, help make the power grid more reliable, and attract overseas investments to our shores.
  • Non-regulatory, voluntary federal guidelines – developed and enhanced with The Roundtable’s support – help real estate companies make the case for energy efficiency.

They also include our collaboration with the Department of Energy and other agencies through the Better Climate Challenge, the national Zero Emissions Building definition, the Buy Clean initiative, and programs that highlight the environmental benefits of commercial-to-residential property conversions.