Energy Manager

Obama plans to win the future via Better Buildings Initiative

February 04, 2011

In his recent State of the Union, U.S. President Obama laid out his vision for winning the future by investing in innovative clean energy technologies and doubling the share of electricity from clean energy sources by 2035. Alongside that effort, the president is proposing new efforts to improve energy efficiency in commercial buildings across the country.

February 4, 2011  By  Anthony Capkun

Last year, commercial buildings consumed roughly 20% of all energy in the U.S. economy. “Improving energy efficiency in our buildings can create jobs, save money, reduce our dependence on foreign oil, and make our air cleaner,” says the White House. The president’s Better Buildings Initiative will make commercial buildings 20% more energy efficient over the next decade by catalyzing private sector investment through a series of incentives to upgrade offices, stores, schools and other municipal buildings, universities, hospitals and other commercial buildings.

This initiative builds on the president’s commitment to passing the proposed Homestar legislation, which encourages American families to make energy-saving upgrades in their homes.

Under the president’s plan, Americans will make commercial building space in the United States 20% more energy efficient through cost-effective upgrades. By making
buildings more energy efficient, business owners will reduce their energy bills by about $40 billion (at today’s prices). The president is also calling for an aggressive reform of existing tax and other incentives for commercial building retrofits and proposing a new competitive grant program. In turn, he is asking corporate leaders to commit to making progress toward his energy goals.

The president’s plan for better buildings
The President’s Budget will propose to make American businesses more energy efficient through a series of new initiatives:


• New tax incentives for building efficiency: The president is calling on Congress to redesign the current tax deduction for commercial building upgrades, transforming the current deduction to a credit that is more generous and that will encourage building owners and real estate investment trusts (REITs) to retrofit their properties. These changes could result in a ten-fold increase in commercial retrofit take up.

• More financing opportunities for commercial retrofits: Access to financing is an important barrier to increased retrofit investment in some market segments. To address these gaps, the Small Business Administration is working to encourage existing lenders 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.

• ”Race to Green” for state and municipal governments that streamline regulations and attract private investment for retrofit projects: Much of the authority to alter codes, regulations, and performance standards relating to commercial energy efficiency lies in the jurisdiction of states and localities. The President’s Budget will propose new competitive grants to states and/or local governments that streamline standards, encouraging upgrades and attracting private sector investment.

• The Better Buildings Challenge: The president is challenging CEOs and university presidents to make their organizations leaders in saving energy. Partners will commit to a series of actions to make their facilities more efficient; in turn, they will become eligible for benefits including public recognition, technical assistance and best practices-sharing through a network of peers.

• Training the next generation of commercial building technology workers: Using existing authorities, the administration is working to implement a number of reforms, including improving transparency around energy efficiency performance, launching a Building Construction Technology Extension Partnership modelled on the Manufacturing Extension Partnership at Commerce, and providing more workforce training in areas such as energy auditing and building operations.

The Better Buildings Initiative will complement the initiatives the president has already launched for government and residential buildings, says the White House, including the $20 billion in funding for building energy efficiency in ARRA.

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