Tax Package Fails to Deliver Certainty Needed to Drive Long-Term Efficiency Investment | Alliance to Save Energy

Tax Package Fails to Deliver Certainty Needed to Drive Long-Term Efficiency Investment

Release Date: Tuesday, December 17, 2019

 

WASHINGTON—The Alliance to Save Energy released the following statement from President Clay Nesler on the tax package being attached to the appropriations legislation moving through Congress, which fails to include needed reforms to energy efficiency tax incentives for homes and buildings and to the electric vehicle tax credit:

“For energy efficiency tax incentives to work, we need forward-looking, predictable policy so that businesses and consumers can plan around them. This package doesn’t accomplish that. It simply extends outdated incentives to expire again in a year.”

“This stop-start extenders cycle is broken. It's not driving energy efficiency investments in homes and buildings the way we need to. And that leaves a huge hole in the tax code. We are not effectively encouraging energy efficiency with tax policy, despite the fact that it’s the largest clean-energy employer in the country and the single most effective solution for climate change. There’s bipartisan support for modernizing these efficiency incentives, and Congress should go back to the drawing board and put together a tax package that includes long-term, modernized incentives for energy efficiency. Every year we go without modernized efficiency incentives we lock in decades of wasted energy use and unnecessary carbon emissions from homes and buildings.”

“Lawmakers also missed an opportunity to include legislation to strengthen the electric vehicle tax credit, which is one of the best tools we have for transforming the efficiency of the transportation sector.”

Three primary tax incentives have previously driven efficiency improvements in buildings: the Sec. 25C credit for existing home improvements, Sec. 45L credit for new home construction, and Sec. 179D deduction for commercial buildings. First adopted in 2005, they have worked only sporadically and with muted impact in recent years because Congress has allowed them to lapse repeatedly and has not updated them to keep pace with efficiency advances in homes, buildings and equipment. The incentives expired most recently on December 31, 2017.

The Alliance has urged Congress to pass the Home Energy Savings Act (S.2588/H.R.4506) and the New Home Energy Efficiency Act (S.2595/H.R.4646) introduced recently to modernize and reinstate two critical tax incentives encouraging energy efficiency in new and existing homes. The bipartisan bills are sponsored by Sens. Maggie Hassan (D-N.H.) and Susan Collins (R-Maine) and Reps. Jimmy Gomez (D-Calif.) and Mike Kelly (R-Pa.) and supported by a broad coalition of manufacturers, trade associations, environmental groups and other stakeholders. The Alliance also supports legislation to strengthen the tax deduction for efficient commercial buildings and lifting caps on the electric vehicle tax credit.

About the Alliance to Save Energy

Founded in 1977, the Alliance to Save Energy is a nonprofit, bipartisan alliance of business, government, environmental and consumer leaders working to expand the economy while using less energy. Our mission is to promote energy productivity worldwide – including through energy efficiency – to achieve a stronger economy, a cleaner environment and greater energy security, affordability and reliability.

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