NACUBO

My NacuboWhy Join: Benefits of Membership

E-mail:   Password:   

 Remember Me? | Forgot password? | Need an online account?

Initiatives
Initiatives
Loading

ENERGY STAR and Section 179D

Talking Points and Other Considerations

Colleges and universities across the country are working to improve energy efficiency and campus operations in order to make higher education more cost effective and improve the environment. As educational enterprises, these institutions also advance knowledge in the workforce and enhance awareness of energy efficiency, climate interaction and energy policy to the benefit of society.

NACUBO suggests that business officers consider this background information and the talking points below in preparation for communications with policymakers and others about the value of energy efficiency and environmental stewardship. 

CONSIDERATIONS

  • Recognize the responsibility lawmakers (and their staff) have for driving priorities in budgeting, tax and federal policies. Help them understand how those policies support institutional success, directly impact the local community, and improve the environment.
  • Illustrate impact on operations. Communications are more effective when you can demonstrate how these issues impact your community and campus.
  • Calculate short-term and long-term operational savings incurred when capital investments are made that improve energy efficiency. Explain that by improving operations there is the ability to redirect financial resources to other campus priorities, such as access and affordability initiatives.
  • Describe impacts on the local community. Explain how campuses can be regional centers for energy savings and efficiency. For example, explain the impact of "going off grid," providing alternative energy, and/or combining heat and power plants. If applicable, describe why your campus is using "demand response" mitigation and describe external benefits to the local community. Emphasize the role the campus plays in business and grid continuity, operations, and transportation issues.
  • Explain campus planning. Discuss how effective campus planning improves space utilization, manages deferred maintenance and works to mitigate negative and enhance positive impacts on local transit and public services.
  • Describe academic training that advances career paths, business growth and prepares a workforce ready to increase energy efficiency, produce renewable energy and mitigate environmental degradation.

PRIORITIES

Extend and expand the Section 179D energy-efficient construction tax deduction.

  • This technology-neutral tax incentive encouraged energy conservation by tying the value of a tax deduction to the actual energy savings generated at the building once it is completed. Energy-efficient improvements that qualify include lighting systems, heating, cooling, ventilation, and hot water systems. 
    • For example, mechanical upgrades to the chiller (used to cool and dehumidify air 26 buildings on campus) at University of South Florida resulted in $199,000 in initial savings and lighting upgrades for parking facilities at the University of Minnesota resulted in over $233,000 in initial savings; ongoing operational savings due to increased efficiency are compounded annually. Often, savings are reinvested in other energy efficiency programs, thus allowing continued efficiency and reduced operational costs. 
  • Originally enacted in 2005, the §179D deduction expired on December 31, 2016. Unfortunately, legislators have not yet taken definitive action to renew the provision.
  • In 2008, Congress permitted governmental building owners to allocate the §179D deduction, meaning that federal, state, and local government building owners (including public institutions of higher education) may make such allocations to one or more persons "primarily responsible for designing the property," such as architects, engineers, contractors, environmental consultants, or energy services providers. Private nonprofit entities lack the ability to enjoy a comparable legal benefit even though their needs are as great. 
  • To level the playing field for private nonprofit organizations and Native American tribes, the Senate Finance Committee approved legislation in 2015 to permit such allocations by nonprofit hospitals, colleges, universities, and other community organizations that embark on energy-efficient construction projects. (Section 160 of the Tax Relief Extension Act of 2015 - S. 1946)
  • Extending Section 179D generally and expanding it to include small and large private organizations, which can include hospitals, health clinics, colleges and other public service institutions, means increased savings on construction and operations.
  • The deduction helps drive ingenuity and design enhancements and encourages innovation and lasting design improvements, all of which will lower nonprofit operating costs.
  • A May 2017 Study of Proposals to Enhance and Extend Section 179D found that:
    • Strengthening and extending the Section 179D Energy-Efficiency Commercial Buildings Deduction will create jobs and expand the nation's economy.
    • Enhancements to Section 179D would support up to 76,529 jobs annually and contribute annually almost $7.4 billion to national gross domestic product ("GDP"), as well as over $5.7 billion towards national personal income.
    • Expanding the availability of the deduction to nonprofit organizations and tribal governments, while increasing the applicable energy efficiency standards, also provide clear positive impacts to the economy.

Maintain funding for the Environmental Protection Agency (EPA) the ENERGY STAR® program.

  • The ENERGY STAR® program was developed by the Environmental Protection Agency (EPA) in 1992 to reduce energy consumption in both residential and commercial structures by having products and buildings evaluated, approved, and certified by an independent third party. This proactive program resulted in energy-saving operations exceeding an estimated $430 billion since its inception.
  • Many institutions of all types use ENERGY STAR® third-party evaluation certification in their procurements to ensure products will deliver the optimum energy efficiency. Without the ENERGY STAR® designation, institutions will need to spend staff time to evaluate product specifications, or risk buying energy-inefficient products.
  • Without ENERGY STAR®, colleges and universities will face increased energy costs and will require additional staff time to procure products.
  • In addition to the product savings, the ENERGY STAR® building designation is a great motivator for designers, contractors, and campus personnel to assure their buildings operate at maximum efficiency.

ADDITIONAL RESOURCES

A number of additional resources can be found here, including NACUBO videos and podcasts, links to college and university posters and publications describing successful case studies, benefits to campuses and the community. Additional resources can be found on the AASHE, APPA, and HEASC websites.