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President Obama and former President Bill Clinton a $4 billion effort to improve energy efficiency in buildings across the country.  President Obama also signed a Presidential Memorandum directing all Federal agencies to maximize existing authorities to utilize performance-based contracting for undertaking energy retrofits on Federal buildings.

Center President Norris McDonald cowrote the first federal shared energy savings law with the National Association of Energy Services Companies (NAESCO), which was signed by President Reagan in 1986.

President Obama directed all Federal agencies to make at least $2 billion worth of energy efficiency upgrades over the next two months. Additionally, 60 private companies, hospitals, cities, states, colleges, and universities, among others, have collectively committed another $2 billion in energy efficiency retrofits to 1.6 billion square feet of property—roughly the equivalent of 500 Empire State Buildings.

The investments announced today are part of President Obama’s Better Buildings Initiative, which set a goal of improving energy efficiency in commercial buildings by 20 percent by 2020. The initiative will reduce energy bills for businesses by $40 billion per year, and one report found it could create up to 114,000 jobs.


On February 3rd, 2011, President Obama announced the Better Buildings Initiative as part of his Administration’s vision for winning the future by catalyzing a homegrown, clean energy economy in the United States. The Better Buildings Initiative set a national target of improving energy efficiency in commercial buildings by 20 percent by 2020. Achieving the President’s goal will reduce energy bills for American businesses by approximately $40 billion per year.

Private Sector Commitments -- The Better Buildings Challenge

The Better Buildings Challenge is the public-private partnership component of President Obama’s Better Buildings Initiative. The Challenge seeks to catalyze private sector investment and has attracted business and community leaders who are committed to supporting innovative ideas with action, sharing their successes, and creating solutions for others to follow. In June, at the Clinton Global Initiative (CGI) America, former President Clinton, Secretary Chu and Laura Tyson from the President’s Jobs Council announced an initial set of commitments totaling 300+ million square feet and $500+ million in financing support. 

This includes:

Commitments from 60 Major CEOs, Universities, Mayors, Labor Leaders and Others. Today’s announcement includes commitments from nearly 60 property owners, corporations, hospitals, financial institutions, cities and states, colleges and universities.

Commitment to Upgrade Approximately 1.6 Billion Square Feet of Commercial and Industrial Property. Every type of commercial building can benefit from cost effective energy upgrades. The companies and other institutions committing to the Better Buildings Challenge are leaders in their respective industries and are pioneering new approaches to create jobs and save money through building upgrades.

Executive Action – Presidential Commitment to $2 billion in Federal Building Energy Upgrades

The Presidential Memorandum directs Federal agencies to enter into a minimum of $2 billion in performance-based contracts over the next 2 years. Performance-based contracting is an innovative approach to financing building upgrade projects that uses long-term energy savings to pay for up-front costs, resulting in no cost to taxpayers. The approach leverages Energy Savings Performance Contracts (ESPCs) wherein Energy Service Companies (ESCOs) and utility companies conduct energy upgrades of federal buildings and guarantee savings from the improvements. The U.S. Chamber of Commerce has recognized that full implementation of this existing federal authority to utilize Energy Savings Performance Contracts (ESPCs) as critical to job creation. The Chamber has specifically noted that tens of thousands of new jobs can be created through ESPC programs across the Federal government and that the President’s Better Buildings Initiative was the ideal platform for maximizing this opportunity. Data from the Department of Energy reveals a tremendous potential for efficiency investment opportunities in Federal buildings with less than 10-year paybacks.

Improvements to Existing Tax Incentives

The President continues to seek ways to reform and modernize our tax code in a manner that optimizes outcomes for both businesses and individuals. The Internal Revenue Code currently provides a deduction for the cost of qualifying energy efficient commercial building property, commonly referred to as the section 179D tax deduction. The Treasury Department, in consultation with the Department of Energy, previously issued guidance that provides the energy savings targets that must be met for this deduction to be available.

(The White House)