Today, President Obama and former President Clinton rolled out a new challenge, focusing on public and private sector investment in energy efficiency upgrades for federal buildings.  The first portion, dealing with private buildings, challenges the private sector to upgrade nearly 1.6 billion square feet of commercial and industrial property.

The second portion, focusing on federal building energy efficiency upgrades, highlights the Energy Savings Performance Contracts (ESPC).  Finally, the third portion, dealing with existing tax incentives, looks at improving section 179D of the Internal Revenue Code that allows for deductions for the cost of qualifying energy efficient commercial buildings. 

This is a welcomed announcement as manufacturers, using nearly one-third of the nation’s energy, rely on energy efficiency to reduce the cost and use of energy and pollution.  Furthermore, the streamlining of section 179D is an important step as it will improve utilization of the credit. 

Most importantly, as the challenge pushes for the private sector improvements, it also requires the federal agencies to enter into a minimum of $2 billion in performance-based contracts over the next 2 years.  It’s important to note that this financial commitment is based on the energy savings that the federal buildings will realize after the upgrade. 

This will allow manufacturers to assess and upgrade federal buildings while driving demand for these products and technologies and creating new jobs. This is a welcomed policy at a time when employment report for November shows a stall in manufacturing jobs.

Mahta Mahdavi is director of energy and resourced policy, National Association of Manufacturers.

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