WASHINGTON – The Alliance to Save Energy called on Congress Tuesday to address a “critical flaw” in the U.S. tax code by modernizing and reinstating energy efficiency tax incentives to give consumers and businesses the market signals needed for strong efficiency gains.

In a written statement to the House Ways and Means Committee for a hearing on temporary tax incentives, Alliance President Jason Hartke emphasized that the tax code is ignoring energy efficiency despite the fact that it is widely recognized as the most powerful tool we have for reducing carbon emissions and is also the largest economic sector in the clean energy economy –  driving innovation, saving Americans’ money, and supporting more than 2.3 million jobs.

“We view this as a critical flaw not just in tax policy but also in our climate and economic policy. Energy efficiency is the most powerful energy resource we have. It’s both an enormous economic opportunity – by far the largest job-creator in the clean energy sector – and the single most effective solution we have for climate change,” Hartke said in the statement. “Yet it has been years since the U.S. had meaningful, long-term efficiency incentives, and more than a year since we had any incentives at all.”

“We urge you to rectify this omission by modernizing the existing temporary efficiency incentives and passing forward-looking, multi-year extensions,” he said. “Reflecting the environmental and economic opportunities presented, we believe such extensions would draw strong support not only from efficiency and environmental advocates but also from the business community.”

Homes and buildings account for 40 percent of U.S. energy consumption. Tax incentives encouraging energy efficiency improvements can reduce energy demand, reducing operating costs and pollution.

Three tax incentives for energy efficiency in homes and buildings expired Dec. 31, 2017, leaving no direct incentives for energy efficiency in the tax code. The expired incentives are the 25C credit for homeowner efficiency improvements, the 45L credit for new home construction and the 179D deduction for commercial buildings. The Alliance is calling on Congress to modernize the incentives with updated efficiency thresholds and higher incentives reflecting today’s market and performance capabilities.

According to the International Energy Agency, energy efficiency must account for at least 40 percent of the emissions reductions needed to meet global targets. According to the U.S. Energy and Employment Report, energy efficiency already supports more than 2.3 million jobs across the United States – among the most in the entire energy economy. Almost 70 percent of those jobs are in construction and manufacturing.

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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