Recently introduced legislation could be a positive step forward for the commercial glazing industry. Yesterday Senator Ben Cardin (D-Md.) introduced the Energy Efficiency Tax Incentives Act (S. 2189), restoring energy efficiency tax incentives, specifically the 179D tax deduction for commercial buildings, that expired in 2013.
The 179D provision currently allows building owners to claim a tax deduction of $1.80 per square foot of building area to install systems that reduce the total energy and power costs by 50 percent or more when compared with a reference building. The deduction applies to nearly all commercial, high-rise multifamily residential, health care, institutional, public, and educational facilities. It also allows public building owners to allocate the deduction to the designer of energy efficient property. Senator Cardin’s bill raises the tax deduction to $3 per square foot, among other key improvements.
Bill Yanek, executive vice president of the Glass Association of North America (GANA), says the organization is in support of such tax credits that favor the construction industry.
“Over the course of the past few years, especially as commercial construction continued to struggle, GANA supported tax policies that would spur commercial construction,” says Yanek. “With regard to energy efficient construction, tax incentives are especially important to help offset initial commercial construction/improvement investment that may only prove financially viable over a long period of time.”
Noting that buildings are responsible for roughly 40 percent of all energy consumed in the U.S., Yanek adds that GANA urges Congress to renew and strengthen the 179D tax deduction.
“More widespread use of energy-efficient glazing in commercial buildings represents one of the most readily available methods to improve building energy performance,” says Yanek. “Glazing systems have made dramatic advances in energy efficiency during the past decade. By replacing the existing glazing with modern materials and systems, commercial buildings can realize significant energy savings. 179D helps ensure that the right incentives exist for people to invest in energy efficient building materials to realize these savings.”
Likewise, the American Architectural Manufacturers Association (AAMA) agrees that this recently introduced bill is important legislation.
“This legislation will allow commercial, multi-family and residential property owners to invest in properly retrofitting the building envelope to ensure that sourced energy is not wasted. Through S2189, building owners can make energy-efficiency improvements using a systematic and methodological approach, which begins with incorporating the technologically-advanced fenestration products available today,” says Maureen Knight, AAMA’s government affairs/product stewardship manager. “The increase of the 179D allowance to a $3/square-foot maximum for achieving a 50 percent or higher source energy savings offers the type of incentive that prompts building owners to invest in energy efficiency. And, homeowners will benefit greatly through the substantive credits offered for investing in energy-efficient products that decrease their energy consumption.”