AHRI Applauds Senate for Recognizing Energy Efficiency’s Role as Economic Stimulus
Oct 3, 2008
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The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) applauds the U.S. Senate’s action to extend tax incentives that encourage consumers to purchase energy efficient heating and cooling equipment, as well as a provision that incentivizes commercial builders to construct highly efficient buildings. The Senate included these provisions in the economic rescue bill passed yesterday.
“Inefficient use of energy is often overlooked as a major contributor to downturns in the economy,” said AHRI president Stephen Yurek. “But when you consider rising energy costs and that heating and cooling accounts for more than a third of a building’s energy costs, the monthly savings that could be achieved through the installation of more efficient heating and cooling equipment could provide an excellent economic stimulus. Making these upgrades will not only save consumers money each month, but also achieve increased indoor comfort and reduced air pollution. We applaud the Senate for recognizing these important benefits, and hope the House will do the same.”
The Energy Policy Act of 2005 provided federal tax credits for consumers who purchased and made specific energy efficiency upgrades to their homes such as installing highly efficient central air conditioners, furnaces, water heaters, boilers and heat pumps. Those incentives, which expired last year, will be extended through 2009 if the Senate-passed bill is ultimately signed into law.
“Incentives work because they offset the initial purchase cost, while paving the way to greater energy savings down the road, which is good for consumers, the economy and the environment,” said Yurek.
For commercial buildings, the Senate bill extends for five more years a tax deduction for expenses incurred for energy efficient building expenditures made by a building owner. The deduction is limited to $1.80 per square foot of the property, with allowances for partial deductions for improvements in interior lighting, HVAC, and hot water systems, and building envelope systems.
“This extension provides a more realistic time period for building owners to take advantage of the incentive,” said Yurek. “It takes, on average, 5 years from commissioning to completion of a new building, but the deduction, which was included in the Energy Policy Act of 2005 and expires this year, only gave building owners two years to take advantage of it. This severely limited the value of the incentive and its original intent of achieving a nation of high performance buildings and reducing peak electrical demand.”
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