Study documents major job growth from energy-saving tax incentive
Between 40,000 to 77,000 new jobs per year created with renewal of 179D Tax Deduction
For immediate release:
Washington, D.C. - May 23, 2017 - As many as 77,000 new design and construction jobs would be created annually over 10 years - along with almost $7.4 billion more in annual GDP - if Congress and the Administration continue an important energy efficiency tax policy, according to an economic impact study released today.
Section 179D of the tax code, also known as the Energy Efficient Commercial Buildings Deduction, allows qualifying building owners and businesses to receive up to a $1.80 per square foot tax deduction for certain energy efficient improvements placed into service during all open tax years. It was originally passed by Congress as part of the Energy Policy Act of 2005 in direct response to broader energy usage and independence concerns.
The study by Regional Economic Models Inc. (REMI) documents job creation and GDP growth under three scenarios that continue energy efficiency tax policies:
· Modernizing Section 179D, including increasing the deduction to $3 per square foot and making certain other reforms to strengthen it, generates significant job creation - on average 76,529 per year during its first decade.
· A long-term extension of the deduction at its current $1.80 per square foot level creates an average of almost 41,000 jobs per year over 10 years.
· A long-term extension at $1.80 per square foot, extension of the deduction to hospitals, schools, and other non-profits and to tribal community facilities, and an increase in the energy efficiency requirements creates almost 40,000 jobs per year over the next decade.
"Strengthening, modernizing, and extending energy conservation tax deductions will power economic growth, increase jobs and generate billions for our economy," said AIA President Thomas Vonier, FAIA. "If Congress wants to achieve the same kind of goals through tax reform, we must maintain proven drivers of jobs and economic growth," he said, noting that the Section 179D deductions have been highly effective.
The economic growth and job creation generated by a modernized Section 179D would result in a striking GDP return of ten to one when considering the cost of the tax policy, the study finds.
The study was co-funded by the American Institute of Architects (AIA), along with Alliant Group LP, Ameresco, The Building Owners and Managers Association (BOMA) International, Blue Energy Group, Concord Energy Strategies, Energy Tax Savers, Energy Systems Group, National Electrical Manufacturers Association (NEMA), the Natural Resources Defense Council (NRDC) and the United States Green Building Council (USGBC). Access the full study here.
According to the U.S. Department of Energy, commercial buildings accounted for 18.6 percent of all primary energy consumption in the U.S. in 2010. Of this, electricity accounted for 77 percent, the majority of which (62.9 percent) went for lighting, heating, cooling, and ventilation.
About The American Institute of Architects
Founded in 1857, the American Institute of Architects consistently works to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public wellbeing. Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.