President Signs Economic Recovery Bill with Billions for Green Building, Energy Efficiency

Published: 2/19/2009

Following weeks of negotiations in Congress and the Administration, and in the face of continuing job losses nationwide, President Obama signed into law on Tuesday a $787 billion economic recovery plan designed to put millions of Americans back to work. Emphasizing investment in projects that can be deployed quickly and create jobs, the American Recovery and Reinvestment Act of 2009 includes billions of dollars that may be used for green building, retrofitting, energy efficiency and renewable energy projects, including those in federal facilities; states, localities, and tribal areas; schools; and housing.

Energy efficiency in existing buildings can generate $160 billion in savings by 2030, according to a report by McKinsey and Co. The American Recovery and Reinvestment Act takes critical steps to this end through significant investment in green building and energy efficiency. Commitment from policymakers, citizens, and practitioners nationwide will be required to ensure that the immense potential of green building to reinvigorate and transform both our economy and our environment is realized.

Select Highlights of the American Recovery and Reinvestment Act of 2009

  • Green Schools: The new law includes a $53.6 billion State Fiscal Stabilization Fund, to be administered by the federal Department of Education that will provide, among other things, funds to governors for use in restoring and providing state funding to school districts. Roughly $9 billion of this fund will be available for use by governors to address public safety and other government services, which may include school modernization, renovation, and repair consistent with a recognized green building rating system.Additionally, the Act establishes a new kind of tax credit bond that may be issued by states and local governments “for the construction, rehabilitation, or repair of a public school facility or for the acquisition of land on which such a facility is to be constructed.”
  • Green Federal Facilities: The law provides $5.55 billion to the federal General Services Administration (GSA) for federal buildings, including $4.5 billion for measures to make GSA facilities “high-performance green buildings,” as defined by the 2007 energy law. The law also requires that $4 million of funds provided be directed for GSA’s Office of Federal High-Performance Green Buildings, which was created by the 2007 energy law.The Act also provides several billion dollars for facility-related construction, renovation, and repair projects in other federal agencies, including the Department of Defense.
  • Home Weatherization: The Act provides $5 billion for the federal Weatherization Assistance Program, which provides assistance to low-income families in weatherizing and improving the energy efficiency of their homes. To broaden the program’s reach, the Act increases the income levels covered by the program (from 150% of the federal poverty level to 200%) and the amount of assistance available for each housing unit (from $2,500 to $6,500). The Act also increases the percentage of funding that may be used for training and technical assistance (from 10% to up to 20%).
  • Energy Efficiency in States and Localities: The Act provides $3.2 billion for the Energy Efficiency and Conservation Block Grant program, which was established by the 2007 energy law to provide support to states, localities, and tribal governments for energy efficiency and conservation programs and projects. Under the Act, $2.8 billion will be distributed by formula, and $400 million will be administered through competitive grants.
  • Public Housing: The Act provides $4 billion for the Public Housing Capital Fund, which provides funds to public housing agencies nationwide for the development, funding, and modernization of public housing developments. Under the Act, $3 billion of the funds will be distributed by formula, and $1 billion will be made available as competitive grants “for priority investments, including investments that leverage private sector funding or financing for renovations and energy conservation retrofit investments.”
  • Retrofitting Assisted Housing: The Act provides $2.25 billion for federally-assisted housing, of which $2 billion is for payments to owners of certain project-based rental housing, and $250 million is for funding of green and energy retrofitting investments in assisted housing.
  • Green Jobs: The Act provides $3.95 billion for training and employment services under the Workforce Investment Act, including $500 million “for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries.”Additionally, the bill provides $250 million for building, rehabilitating, and acquiring Job Corps Centers, of which up to 15% ($37.5 million) may be directed “to meet the operational needs of such centers, which may include training for careers in the energy efficiency, renewable energy, and environmental protection industries.”
  • Tax Incentives for Energy Efficiency and Renewable Energy:
    • Energy-Efficient Existing Homes: Existing federal law provides an individual tax credit of 10% of expenses for certain energy-efficient improvements to existing homes. Previously, the tax credit offered specific, capped amounts for qualified property. Under the bill, the amount of the credit has been raised to 30% for 2009 and 2010, and these technology-specific caps have been lifted and replaced with a $1,500 total cap on installations that may qualify for credit. Referenced efficiency levels have also been updated.
    • Renewable Energy Production Tax Credit: The bill extends the production tax credit for wind facilities by three years to 2013, and for solar, biomass, geothermal, landfill gas, trash combustion, hydropower, and marine and hydrokinetic to 2014.
    • Temporary Election of Investment Tax Credit: Recognizing the uncertainty of investor tax liability owing to the economic downturn, the new law temporarily permits eligible taxpayers to elect the investment tax credit instead of the tax credit for production of renewable energy for facilities placed in service after December 31, 2008.Additionally, the bill modifies the existing investment tax credit to eliminate the dollar caps for solar, geothermal, and small wind property.
    • Treasury Grants for Energy Investment: Acknowledging the decreased effectiveness of energy tax credits due to the economic downturn, the law permits taxpayers to apply for grants from the Treasury Department in lieu of certain renewable energy investment tax credits.
    • Advanced Energy Investment Tax Credit: The law creates a new 30% tax credit-to be awarded through a competitive process–for investment in facilities that manufacture “advanced energy property,” for example, technologies for producing renewable energy, conserving energy, transmitting renewable energy, and reducing greenhouse gas emissions, among other purposes determined by the Secretary.
    • Among other incentives, the bill provides increased authorizations for clean renewable energy bonds (increased by $1.6 billion) and qualified energy conservation bonds (from 800M to $3.2 billion).For a complete summary of the law, please visit: