DURING;THE;1990s,;MANAGERS;DID;A;LOT;OF;LIGHTING RETROFITS.;BACK;THEN,;THE;STANDARD;LAMP;WAS;40;WATTS. SINCE;THEN,;ADDITIONAL;IMPROVEMENTS;PRODUCED;A;32- WATT;LAMP;AND;NOW;A;25-WATT;LAMP—INNOVATION;THAT HAS;LED;TO;A;40;PERCENT;SAVINGS.
BBI is hoping to spark more participation with added financial incentives.
So far, the government has earmarked $20 billion for energy efficiency improvements to government and residential buildings as part of the American
Reinvestment and Recovery Act (ARRA). For example, the ARRA provided
the General Services Administration with $5.5 billion to improve the energy
performance of existing buildings and to jumpstart a new generation of energy efficient buildings.
In addition, President Obama is calling on Congress to alter the current
tax deduction for commercial building upgrades, transforming the current
deduction to a credit that will encourage building owners and real estate
investment trusts to retrofit their properties.
The administration is also working to make financing more widely available, encouraging property owners to take advantage of recently increased
loan size limits to promote new energy efficiency retrofit loans for small
businesses. The president’s budget will also propose a new pilot program
through the Department of Energy to guarantee loans for energy efficiency
upgrades at hospitals, schools and other commercial buildings.
Currently, the BBI does make tax incentives available to owners/proper-ties that achieve a 50 percent reduction in energy costs.
“Since many properties have already implemented energy management
improvements because it made good business sense, the current tax incen-
tives based on reducing energy costs by 50 percent are unrealistic,” said
Veith.“In order for the BBI to provide the impetus for the next generation of
energy efficiency upgrades, tax in-
centives based on incremental im-
provements to energy cost reduc-
tions needs to be pursued.”
If more attractive tax incentives
materialize, as many hope, it could
spark more energy retrofits across
the commercial real estate sector.
Certainly, added financial incen-
tives will motivate some owners
to step-up energy efficient efforts,
adds Weber. “The big push with BBI
is if the incentives and tax credits
are obtainable, it will help owners
take that next step that maybe they
couldn’t do financially before.”
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