Could expired federal tax credits that promote energy efficiency in buildings get a second life? Yesterday three U.S. Senators introduced the Energy Efficiency Tax Incentives Act with an eye on reviving a popular-but-now-shuttered tax credit for commercial buildings and boosting other tax incentives for energy efficient strategies in the building sector.

The bill was quickly endorsed by a number of organizations such as the American Institute of Architects, the Natural Resources Defense Council, and the National Electrical Manufacturers Association.

Introduced by Ben Cardin (D-Md.), Dianne Feinstein (D-Calif.), and Brian Schatz (D-Hawaii), the bill seeks to restore the section 179D commercial building deduction that expired at the end of 2013 and extend the credit through 2016 for energy efficiency improvements to a building's building envelope and lighting and HVAC systems. In addition, the bill seeks to apply the credit to multifamily buildings, expand coverage to apply to more retrofits, and increase the maximum deduction allowed from $1.80 per square foot to $3.00 per square foot.

The bill also proposes new tax credits to help homeowners and builders to be more efficient, including a performance-based homeowner tax credit of $2,000 for renovations that increase their home's efficiency by at least 20 percent, with the provision that the credit could increase by $500 for every additional five percent of energy use improvement up to a cap of $5,000 for home renovations that increase performance by 50 percent or more.

Other provisions in the bill target industrial energy and water use by expanding the current investment tax credit for combined heat and power systems, creating a credit for highly efficient thermal biomass systems, and a creating an investment credit for waste heat-to-power systems. Other proposed credits address CFC chiller replacements and reduced water use in the manufacturing sector.Senator Cardin's website posted the following commentary from the bill's three sponsors:

“Energy efficiency improvements are a smart, cost-effective way to reduce pollution, increase the competitiveness of our manufacturers, and put Americans back to work. It’s simply good business and good policy,” said Senator Cardin, a member of the Senate Finance and Environment and Public Works Committees. “As a nation, we are becoming more energy efficient, but we have a long way to go. Encouraging the retrofitting of existing buildings needs to be a priority as up to 80 percent of the buildings standing today will still be here in 2050. Our Tax Code can be an effective tool in promoting energy efficiency building and retrofits in all sectors.”

“Energy efficiency is one of the most cost-effective options we have to reduce energy consumption and greenhouse gas emissions,” said Senator Feinstein, Chair of the Appropriations Energy and Water Subcommittee. “The Energy Efficiency Tax Incentives Act will reward investments in the commercial, residential and industrial sectors based on actual improvements to their energy efficiency. The smart tax incentives in the bill can promote green jobs, reduce pollution and expand the market for energy efficient technologies and products.”

“As we transition to a clean energy economy, we must do more to adopt energy efficiency policies that make it easier for businesses and homeowners to save energy and reduce carbon pollution while saving money,” Senator Schatz, Chair of the Energy and Natural Resources Water and Power Subcommittee, said.  “These tax incentives will encourage energy efficiency in buildings and in America’s industrial sector and create new construction and manufacturing jobs.”