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Business and Policy Areas
Business and Policy Areas

Leading the Nation to a Safe and Secure Energy Future

June 28, 2012

As Congress considers comprehensive tax reform, NACUBO, Second Nature, and the American College and University Presidents' Climate Commitment (ACUPCC) are presenting federal policy options for changes in tax policy. In addition, they are calling for investments in federal grant programs that would allow colleges and universities to increase operational efficiencies and reduce long-term energy expenses. The white paper exploring these options was released on Thursday, June 21, at the ACUPCC Climate Leadership Summit.

As nonprofit organizations, independent and public institutions can find it challenging to identify external-especially federal-resources to help finance energy efficiency or renewable energy endeavors. Many existing federal energy efficiency or renewable energy incentives were designed as tax incentives for for-profit enterprises or as grant opportunities for state and local governments.

While many colleges and universities have tackled the low-hanging fruit of energy efficiency and conservation on campuses, the paper argues that significant energy efficiency-savings of 50 percent or more-is possible and represents a tremendous opportunity for institutions to further reduce operational costs. Because these bigger projects carry a much longer payback, often over 20 or more years, the resulting "cost feasibility gap" is simply too big for many institutions to prudently invest. Assisting institutions in meeting the initial costs of pursuing energy efficiency opportunities, including infrastructure modification and renewable energy alternatives, could allow institutions to adopt projects that would result in significant cost reductions.

The ACUPCC Financing Committee and NACUBO's Sustainability Advisory Panel, in conversations with many individual campuses, higher education associations, NGOs, and other key stakeholders, identified five policy options for fostering energy efficiency and renewable energy in higher education. These specific policy solutions will enable nonprofit higher education institutions of all sizes and types to reduce energy consumption, increase efficiencies, avoid risks, and improve their long-term financial sustainability.

  • Allow colleges and universities to use tax-exempt and revenue bond financing to pre-pay power purchase agreements.
  • Develop new energy efficiency and renewable energy loan options for institutions of higher education, including a federal loan guarantee program and a federal revolving loan fund for energy efficiency initiatives.
  • Establish, alter, and fund federal grant programs, including Section 471 of the Energy Independence and Security Act of 2007.
  • Allow long-term charitable deductions and tax credits for biomass and bio-methane contributions.
  • Extend eligibility of Clean and Renewable Energy Bonds (CREBs).
Moving forward, NACUBO, Second Nature, and the ACUPCC will develop a long-term advocacy strategy for adopting policy changes.

Second Nature, a 501 (c)(3) nonprofit organization, serves and supports senior college and university leaders in making sustainability the foundation of all learning and practice in higher education. Second Nature convenes and supports the American College and University Presidents' Climate Commitment (ACUPCC), an initiative of more than 675 college and university presidents who have committed their institutions to pursuing climate neutrality and integrating climate action and sustainability in their education and research.


Liz Clark
Senior Director, Federal Affairs