After pouring billions of stimulus dollars into “greening” federal facilities, the White House now wants to spur similar upgrades to commercial buildings, which account for 20% of total U.S. energy consumption. President Obama’s newly proposed “Better Buildings Initiative” includes tax, lending and grant provisions to encourage private owners to install energy-efficiency improvements in their existing buildings. Federal agencies can carry out some of the new steps on their own, but others will require convincing a more heavily Republican Congress to approve them.

The plan, announced on Feb. 3, aims to make commercial buildings 20% more energy efficient in 10 years. If the proposals become reality, Obama says businesses could save nearly $40 billion in energy costs per year.

Design, construction and energy-conservation groups give the proposal high marks. Andrew Goldberg, the American Institute of Architects’ senior director for federal relations, says, “This is really a win-win for everybody if you can provide some of these incentives to make buildings more efficient.” Lane Burt, the U.S. Green Building Council’s technical-policy director, says, “Ideally, what it’ll mean is a faster economic recovery in a sector that’s still struggling a bit.”

A key part of the package is a proposed tax credit for commercial-building upgrades. It would replace a current tax deduction for such work. Goldberg says the present deduction is up to 60¢ per sq ft for upgrades in each of three areas: HVAC systems, shell and lighting. A White House statement says the credit would be “more generous” than the deduction but didn’t provide specifics.

Another element is “Race to Green,” a proposed federal grant competition for states and cities that adopt building codes, regulations and standards to promote energy efficiency. Obama says the message to states and cities is: “If you show us the best ideas to change your game on the ground, we’ll show you the money.”

Still, Obama will have to win GOP support for the tax credit and grants. Burt says cutting businesses’ energy costs, retrofitting their buildings and creating jobs is “a pretty bipartisan issue.” He points to Senate Democrats Jeff Bingaman (N.M.) and Dianne Feinstein (Calif.) and Republican Olympia Snowe (Maine), who have backed an enhanced building-upgrade deduction.

Given Republicans’ anti-spending drive, getting the grant program through will be tougher, says Brad Penney, the Alliance to Save Energy’s government relations director. But Penney says the grants will help fiscally ailing states and cities and draw private financing for upgrades. He says, “In terms of making this bipartisan, the leveraging private-sector investment, I think, is going to be crucial to selling the ‘Race to Green’ initiative.”

Highlights of Green Buildings Blueprint
New tax credit for commercial-building upgrades, replacing current deduction
Federal grant competition for states, cities that have energy-efficiency codes and regulations
New DOE pilot loan-guarantee program for hospitals, schools, other commercial buildings
SBA to encourage banks to increase lending for retrofits, under recently boosted loan limits
Use agencies’ existing authority to spur training for building-technology workers
Source: white house