One-Year Extension of Energy-Efficiency Tax Incentives a Positive (but Limited) Step, Says Alliance to Save Energy

Congress’s 1-year extension of selected energy-efficiency tax incentives - expected to be signed into law shortly by President Bush - is a positive, but time-limited, step for promoting energy efficiency throughout the U.S. economy, the Washington, D.C.-based Alliance to Save Energy said on Dec. 11, 2006. The bill extends through 2008 existing tax incentives for new energy-efficient commercial buildings and for the construction of energy-efficient new homes, as well as for installation of solar equipment in homes and businesses. The alliance has maintained that the original 2-year window for the tax credits, through 2007, was not sufficient to effect real market transformation and to make energy-efficient buildings the norm. “We’re delighted that the 109th Congress recognized the importance of the existing energy-efficiency tax incentives to America’s homes and businesses by making the extension of these incentives one of its last official acts,” says Alliance President Kateri Callahan. “We are disappointed, however, that Congress passed only a 12-month extension when businesses, in particular, have planning horizons that are much longer and often require certainty of future tax treatment in order to justify proposed expenditures on energy efficiency.” She adds, “The Alliance to Save Energy will work with the new Congress to extend the currently available tax incentives for a period of time sufficient to ensure that our national investment fosters development of a long-term and sustainable market for energy-efficient products for the building sector.”The Congress did not include an extension of the federal income tax credit of up to $500 for American consumers who make qualified efficiency upgrades to their existing homes. The tax credit, which is set to expire at the end of next year, helps defray homeowners’ costs of energy-efficiency measures - from low-cost purchases such as insulation and sealants to more costly investments like new windows, furnaces, and central air-conditioners - that, in turn, will lower consumers’ energy bills and their contributions to air pollution and global warming for decades to come. The alliance plans to work with the 110th Congress to improve, expand, and extend the provisions for existing homes, in addition to seeking longer extensions for new homes and commercial buildings.This information was reprinted with permission from the Alliance to Save Energy, a coalition of prominent business, government, environmental, and consumer leaders who promote the efficient and clean use of energy worldwide to benefit consumers, the environment, economy, and national security. To find out more, visit (www.ase.org).