News Article
August 29, 2012

Emerging US Priorities and Market Trends in Energy Efficiency

The energy services market is positioned for a decade of growth that can be accelerated by new market and policy actions. Iain Campbell, Vice President and General Manager of Global Energy and Workplace Solutions for Johnson Controls, recently provided an update and perspective on the future of the energy services market in the U.S.  In addition, the Real Estate Roundtable recently testified on “Financing Efficient Buildings” before the U.S. Senate Committee on Energy and Natural Resources. Combined, these two commentaries give a perspective on federal policies and business innovations that can drive growth in the nation’s energy services industry.

 

Boosting energy services

 

Campbell asserted that energy services will find growing success through:

  • New financing models that allow energy efficiency investments to take the form of operating expenses and not compete with other needs for capital. These models include shared savings agreements and property-assessed clean energy (PACE) financing.

  • Increased instrumentation, interconnection and analytics in buildings,  enabling increased energy savings, easier measurement and verification of those savings, continuous improvement in energy management, better visualization of energy savings, and increased sales of demand response and energy efficiency as services to the electric grid.

  • Increased transparency, lower costs, and greater value delivery by energy service companies.

  • Supporting legislation that allows bundled energy performance contracting to achieve greater cost and energy savings.

 

Productive federal policies

 

The Real Estate Roundtable pointed to six federal policies that can help drive increased investment in efficient commercial buildings:

  • Reform of the 179D tax deduction for energy efficient commercial buildings specifically to encourage the retrofit of existing buildings.

  • Authorization of a Department of Energy loan guarantee program to spur private-sector retrofit financing.

  • Legislation to establish information sharing practices so that building owners, appraisers and lenders can more consistently consider energy efficiency attributes when valuing real estate.

  • Legislation that creates voluntary programs and recognition platforms to encourage commercial tenants to cooperate with their landlords and achieve lower energy consumption in buildings.

  • Lowering barriers to foreign investment capital in U.S. real estate by reforming the Foreign Investment in Real Property Tax Act (FIRPTA) and permanently authorizing the EB-5 immigrant investor program – thereby making more funds available to finance building energy upgrades.

  • Curtailing government tenant holdover tenancies, so that buildings can be re-positioned in the market when federal leases expire and attract financing that could be used for capital investments, such as retrofits.

     

August 2012

 

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