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Obama Plans Energy Efficiency Initiative for Commercial Buildings Obama Plans Energy Efficiency Initiative for Commercial Buildings

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Obama Plans Energy Efficiency Initiative for Commercial Buildings

Will call for tax incentives and a competition modeled after Race to the Top.


President Obama holds energy efficient lights as he tours Orion Energy Systems in Wisconsin last week.(JEWEL SAMAD/AFP/Getty Images)

Updated at 8:23 a.m. on February 3.

Building on a pledge in his State of the Union address to invest in infrastructure and clean energy, President Obama will unveil proposals today to improve the energy efficiency of commercial buildings with tax incentives and competitive grants to states and municipalities.


Obama plans to announce the Better Buildings Initiative during today's trip to State College, Pa., home to Penn State University and one of the Department of Energy's Energy Innovation Hubs. Senior White House officials said the proposals could improve commercial building energy efficiency by 20 percent and save businesses $40 billion annually within 10 years.

The officials refused to say how much the initiative will cost, but they said Obama will propose that the costs be paid in part by eliminating tax breaks for oil and gas producers. Those tax breaks add up to about $4 billion a year, though it's not clear how many Obama will ask to eliminate or how much of that money he would channel into the new initiative.

The proposals, however, will almost certainly run into opposition in Congress. Between the tea party's mantra of reducing government spending and the political clout of the oil and gas industry, both elements of the plan will likely face a stiff fight on Capitol Hill.


The multi-pronged initiative includes a proposal to turn an existing tax deduction for energy efficiency upgrades into a more generous credit; a new pilot program that would guarantee loans for energy efficient upgrades at hospitals, schools, and other buildings; and a program dubbed "Race to the Green," in which states and municipalities compete for federal grants based on how well their codes and regulations are tailored to encourage upgrades and attract private investment. That program is modeled on the Department of Education's $4.35 billion Race to the Top competition, in which states compete for federal grants based on their pace of education reforms.

Obama will also call on private property firms to upgrade their buildings as part of a "Better Buildings Challenge" that promises companies public recognition and technical assistance.

The announcement follows $20 billion in stimulus funding for upgrading homes and government buildings. The White House estimates the residential portion will eventually retrofit 600,000 homes.

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