Advocacy Update: Green Lights Ahead for 2021

By Michael R. Davis FAIA posted 9 days ago


Two recent actions by the US Congress indicate that improving the energy efficiency of commercial buildings is an idea that enjoys bipartisan support.

Representatives Schneider (D-IL) and Rice (R-SC) filed the Energy Efficient Qualified Improvement Property, or E-QUIP, Act (HR 8930) in the House Ways and Means Committee on December 9th, 2020. As a piece of stand-alone legislation, this bill would create a 10-year accelerated depreciation cost recovery mechanism for the purchase and installation of high-performance heating and cooling, lighting, and building envelope components. The AIA has been advocating to make E-QUIP an amendment to the tax code since spring of 2019. The bipartisan bill is expected to be reintroduced early in the 117th Congress.

Also highly significant, the recently passed $900B Consolidated Appropriations Act of 2021, also known as the “Second Coronavirus Relief Package”, contains provisions that would make the 179D Energy Efficient Building Deduction a permanent part of the US tax code. It would also allow the up-to-$1.80 per square foot deduction to increase annually as indexed to inflation. AIA had been calling for a $3 per square foot deduction, but tying the deduction to inflation this is a positive step in the right direction. Importantly, the legislation also updates the ASHRAE Standard going forward. Instead of locking it in at ASHRAE Standard 90.1-2007, the legislation now requires a 50% improvement over whichever ASHRAE 90.1 standard had been current two years before construction began.   While there is still more work to do, these changes would greatly enhance the effectiveness of 179D and relieve the AIA from lobbying for its renewal.

Lastly, President-Elect Biden’s cabinet appointments continue to reinforce his claim that fighting climate change will be among his Administration’s top priorities. In my opinion, the most intriguing of these may be his nomination of Janet Yellen for Treasury Secretary. Yellen, formerly chair of the Federal Reserve, is a founding member of the Climate Leadership Council and has been a vocal supporter of national carbon pricing. Nominees Michael Regan for EPA Administrator, Jennifer Granholm for Energy Secretary, Brenda Mallory for chair of the Council on Environmental Quality, Gina McCarthy and Ali Zaidi as chief and deputy National Climate Advisors and John Kerry as “climate envoy” to the National Security Council could all be transformational in their new roles.