Qualified Energy Conservation Bond (QECB) Update: New Guidance from the U.S. Department of Treasury and Internal Revenue Service

Qualified Energy Conservation Bonds (QECBs) are federally-subsidized bonds that enable state, tribal, and local government issuers to borrow money to fund a range of energy conservation projects at very attractive borrowing rates over long contract terms. In June 2012, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) published a notice to clarify what constitutes a qualified project for potential issuers of the approximately $2.5 billion of remaining QECB issuance capacity. The guidance addresses two qualified uses of QECB proceeds—how issuers should measure energy use reductions in publicly-owned buildings and what constitutes a green community program.