The Biden-Harris Administration’s first-ever Federal Building Performance Standard sets an ambitious goal to cut energy use and electrify equipment and appliances in 30 percent of the building space owned by the Federal government by 2030.
To reach that mark, agencies will be buying American-made products such as heat pumps, electric water heaters, and other energy efficiency and building system technologies supported by the Inflation Reduction Act.
This is the latest step forward in pursuit of President Biden’s goal of achieving net-zero emissions in all Federal buildings by 2045.
As a complementary step, the U.S. Department of Energy (DOE) has also introduced rulemaking to electrify new Federal buildings and Federal buildings undergoing major renovations. As the country’s single largest energy consumer and building manager, these new actions will save taxpayer dollars by reducing energy use while cutting millions of tons of greenhouse gas emissions, increasing resilience, strengthening U.S. energy independence, and growing the jobs of the future in America.
In the United States, residential and commercial buildings represent 35 percent of carbon dioxide emissions. Commercial and government buildings cost $190 billion to power each year. With eighty percent of all existing U.S. buildings expected to remain in service in 2050, electrifying existing buildings is essential to achieving President Biden’s climate goals.
To support building owners, developers, and contractors seeking to meet a building performance standard, the President’s Inflation Reduction Act provides substantial tax incentives. Under the revised Energy-Efficient Commercial Buildings Deduction, 179D, the total available deduction for developers and contractors completing these projects will nearly triple, increasing from $1.80 per square foot to potentially $5.00 per square foot, depending on the project’s demonstrated increase in energy efficiency.
Further, the Inflation Reduction Act expanded eligibility for the deduction to a broader range of organizations, including non-profits and tribal governments. The Department of Treasury (Treasury) recently announced that it will release notices to collect input from stakeholders, experts, and the public on key climate and energy tax provisions of the law.
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