Group suggests more federal intervention necessary for sustainability benefits

Energy efficient legislation may need to be changed.

Commercial property managers may benefit from multiple tax incentives for energy efficiency, but there may need to be further reform from the federal government to make it easier to attain funding.

The federal tax incentive Section 179D applies to energy efficiency investment for commercial real estate properties, and according to The Real Estate Roundtable, the government needs to reform this program to make it easier for property management companies to take part.

Benefits of a restructuring would involve improvements in construction employment, cutting overall costs for utilities and improve investment from the private sector, the organization noted. The deduction was initiated in 2005, but many problems arose. This included its availability, which is not easily available to real estate investment trusts. It was intended to be much further reaching than it is currently used, and many companies are only able to use it for retrofits related to lighting systems.

"While we are in favor of an 'all of the above' energy policy, it warrants emphasis that incentives which focus on saving energy as opposed to producing energy get more 'bang for the buck' – particularly given limited federal resources." said Jeffrey DeBoer, president and CEO of the Real Estate Roundtable. "It costs less to save a kilowatt of energy than to create a new one (whether through fossil fuel or renewable technologies). For this reason alone, 179D must be at the fore when crafting sound policy in the energy tax incentives arena."

Energy-efficient material purchase volume to spike
Despite some issues regarding one aspect of commercial real estate energy incentives, the overall level of building materials related to sustainability should improve in the coming years.

Within the next four years, the total level of green construction material demand could rise as much as 11 percent, according to a report from The Freedonia Group. This would bring overall volume to nearly $87 billion. Much of this was due to a boom in the level of solar power usage during the past decade, and this may continue to improve because of the various incentives available. Additionally, there is a heightened level of awareness from commercial industry members about solar power which may help this grow, as well as improve the level of interest in solar products that are LEED certified.

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