Obama's Better Building Initiative Aims to Improve Energy Efficiency and Reduce Costs
In the Better Building Initiative, President Obama proposes new measures to improve energy efficiency in commercial buildings around the United States. The initiative aims to make commercial buildings 20 percent more energy efficient over the next decade by encouraging private sector investment with incentives to upgrade offices, stores, schools, municipal buildings, universities, hospitals, and other commercial buildings.
The goal is to increase cost effective upgrades that will reduce energy bills and save business owners money. The hope is that this cost savings will be used to hire more workers, invent new products, and create shareholder value.
The initiative calls for a reform of existing tax and other incentives for commercial building retrofits, and proposes a new competitive grant program. President Obama is also asking corporate leaders to commit to making progress towards these energy goals. The President’s budget proposal will include efforts to make American businesses more energy efficient through several new initiatives:
- President Obama is asking Congress to redesign the current tax deduction for commercial building upgrades to make the current deduction a tax credit that is more generous and will encourage building owners and real estate investment trusts to retrofit their properties.
- President Obama is also making an effort to address the financing access problems for building retrofits. The Small Business Administration is working to encourage lenders to take advantage of increased loan size limits to promote new energy efficiency retrofit loans for small businesses. Further, the President’s budget will also propose a new Department of Energy program that will guarantee loans for energy efficiency upgrades at hospitals, schools and other commercial buildings.
- The President’s budget will also propose new competitive grants to states and local governments that streamline commercial energy efficiency standards to encourage upgrades.
- President Obama is challenging CEOs and University Presidents to have their organizations set an example in saving energy. Committing to a series of actions to make their facilities more efficient will make the organizations eligible for many benefits including public recognition, technical assistance, and best practices sharing with their peers.
- The Obama Administration is also working to implement reforms that will improve transparency around energy efficiency performance and provide more training in energy auditing and building operations.
The end goal of the Better Building Initiative is to increase energy efficiency in commercial buildings by 20 percent and create a potential cost savings of $40 billion per year.
I'm upgrading property to be more energy efficient because I really want to save money, and if I get some incentive to do it also...great. I wonder if other people, who are not as forward thinking as far as improving properites for the sake of future savings, are going to be as happy with the idea of being told they need to.
This is a fabulous initiative that is long over due. There are a lot of commercial buildings that are already LEED certified, but what a great way to get more companies building green. I also read that REITs will be able to take advantage of the credit too. That is great because some REITs like Cole REIT are already acquiring LEED certified buildings. If more buildings are build to green standards it will be beneficial to multiple industries.
@ Katie - I know that Cole REIT acquired the Bing headquarters late last summer. The Bing building is a LEED Gold certified building. So they definitely seem to be making smart acquisitions.