Article Date: 01/11/2013

Will Recently Extended Tax Breaks for Energy Efficiency Survive for the Long Haul?

By Steve Rizer


Key tax breaks for energy efficiency have garnered at least a temporary stay of execution, but what are their chances of being extended once they come up for renewal again in the not-too-distant future?


At issue are the following credits: the Section 45L new energy-efficient home tax credit, which President Obama (D) last week extended through the end of this year, allowing $2,000 in relief for the construction of for-sale and for-lease energy-efficient homes in buildings of less than three floors above grade; the Section 25C energy-efficient tax credit for existing homes, which also was extended through year’s end and has a lifetime cap of $500; and tax incentives for American manufacturers of highly efficient refrigerators, clothes washers, and dishwashers. Will these breaks endure for the long term? In separate interviews with ConstructionPro Week, here is what a pair of experts on the subject predicted:


American Council for an Energy-Efficient Economy Executive Director Steven Nadel: “I think there is a good chance that some credits will be extended, but many of the qualification levels will be revised upward so only the most efficient products qualify. At a recent Senate hearing, several senators expressed support for revising qualification levels going forward and also establishing longer-term tax credits.”


Rob Mosher, the Alliance to Save Energy’s (ASE) director of government relations: “These tax provisions are important to U.S. jobs and the broader economy. The incentives benefit a wide range of taxpayers, including associations, businesses, individuals, community development organizations, and non-profit organizations. As such, [ASE] is fairly confident that these energy efficiency tax provisions will be extended.”


Obama endorsed the credits when he signed the American Taxpayer Relief bill into law (H.R. 8; P.L. 112-240) last week. Energy provisions are included in Title IV of H.R. 8, which can be accessed through the following link: Title IV provisions specifically addressing energy efficiency in buildings are located in Sections 401, 408, and 409 (pages 63, 76, and 77).



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