WASHINGTON – The Alliance to Save Energy applauds the work of the House Ways and Means Committee on advancing tax incentives during this week’s markup that will drive improvements in energy efficiency across the U.S. economy.

“The Alliance to Save Energy commends the committee for its consideration of key tax provisions that would incentivize energy efficiency investments for homeowners, homebuilders, and commercial building owners. These incentives can lead homeowners and others to choose more efficient products and services while also driving efficiency across the built environment, and this week's markup was an important step forward in reforming these incentives to meet the environmental and economic challenges of the day,” Alliance President Paula Glover said. “This is particularly true for the Section 25C provision, which would be a significant change from current law and would allow homeowners to budget and plan multiple energy efficiency investments over several years. We look forward to our continued work with the committee as these proposals progress on Capitol Hill.”

The Ways and Means Committee has proposed the following reforms under the Build Back Better Act (a complete factsheet is available here):

• Section 25C Energy Efficiency Tax Credit for Non-Business Energy Property: The lifetime cap of the 25C credit would be replaced with an annual cap, and the value of the credit would be increased to 30% up to $1,200. Additionally, the credit would be extended for 10 years. These reforms are largely in line with an Alliance-led letter to House and Senate tax leadership with more than 1,000 signatures from a broad coalition of partners.
• Section 179D Deduction for Energy Efficient Commercial Buildings: The existing lifetime cap is lifted for a three-year cap under the committee’s proposal, with the deduction ranging from $0.50 to $1.00 per square foot of energy efficiency improvements. Additionally, a bonus deduction of $2.50 up to $5.00 per square foot would be available when meeting identified prevailing wage and apprenticeship requirements. The deduction’s expansion is temporary through the end of 2031, after which the provision would revert to gains achieved in December’s Energy Act of 2020.  
• Section 45L New Energy Efficient Home Credit: The value of the credit would be raised to $2,500 for single-family and manufactured homes meeting identified ENERGY STAR requirements, or to $5,000 for homes with Zero Energy Ready Home certification. For multifamily homes, the base credit is $500, or $1,000 for zero energy certification, but when meeting prevailing wage requirements, the base credit is $2,500 or up to $5,000 for zero energy certification. The credit is extended for 10 years.

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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