Slim Pickens for Green Energy | Green Energy News

July 24, 2005 – Vol.10 No.18

SLIM PICKENS FOR GREEN ENERGY.

You’d think after more than 4 years of haggling, Washington could come up with a more exciting energy bill: one that increased average fuel economy to 40 miles per gallon, or one that created a renewable portfolio standard for the entire U.S. of A.

Nah, none of that. That would be too much to handle, too much of a departure from the status quo.

Here are a few highlights of the 2005 Energy Policy Act which President Bush is expected to put his scribble on soon.

--- Beginning January 1, 2006, tax credits will be available to the purchasers of hybrid, fuel cell, clean diesel, electric and other alternative powered cars, light trucks, SUVs etc. The amount of credit will be based on the weight, fuel efficiency rating and emissions level of the vehicle, as determined by the U.S. Environmental Protection Agency.

A tax credit is a dollar-for-dollar reduction on a tax bill for the year the purchase is made.

The base credit for a fuel cell vehicle will be $8000 for a vehicle under 8500 pounds. The credit ends in 2014.

(Of course there are no fuel cell vehicles in showrooms right now.)

Pure, battery electric vehicles can get a credit up to $4000.

(No mass-produced, highway-capable EVs are currently available in the U.S.)

Hybrids get a new, more complicated and less generous tax credit that includes a calculation in improvement in fuel economy. For example, a hybrid SUV weighing less than 8,500 pounds that is 200 percent more fuel-efficient than a 2002 model would qualify for a credit of $1,600. The credit ends in 2009.

Clean diesels will get the same tax credit as hybrids.

(But clean diesels aren’t available in states that have shifted to California emissions standards.)

--- There’s also a conservation credit for certain fuels. It’s based on a projected $1,000 lifetime fuel savings of 3,000 gallons or more.

(Don’t know much about the details of this one.)

--- The excise tax credit for biodiesel is extended through 2007. For agri-biodiesel (biodiesel from soy or other plants) the credit amounts to a penny per percentage point of biodiesel blended with petro-diesel. Biodiesel from other sources (such as from used Freedom Fries cooking oil) gets only a half-penny.

--- The production tax credit (PTC) for wind energy is extended until the end of 2007. But there’s no provision for small wind power generation, such as wind generators for homes.

--- Homeowners can get a tax credit for 30 percent of the cost of buying and installing residential solar water heating and photovoltaic equipment for a maximum credit of $2,000. Solar water heaters for swimming pools and hot tubs do not qualify.

(Hope that your state has additional credits or incentives. 2000 bucks off a $30,000 system isn’t much.)

--- There’s also a 30-percent credit for homeowners who install fuel cells for power generation. The maximum credit is $500 for each .05 kilowatt of capacity. The credit expires at the end of 2007.

(Fuel cells for home use are, for all intents and purposes, still in development.)

--- Energy-efficient improvements to existing homes - insulation, metal roofs coated with heat-reducing pigments, caulking, set-back thermostats, energy-efficient windows, doors, and skylights. - also get a small break Homeowners can qualify for a 10-percent tax credit up to $500, but only $200 can come from expenses for new windows.

--- Other tax credits for homes include: whole house fans air $50; qualifying natural gas, propane or oil furnace or hot water boilers $150; and some electric and geothermal heat pumps $300.

--- Buyers of new homes may benefit indirectly from a business tax credit applied the construction of energy-efficient homes. Contractors and other suppliers installing energy-efficient heating and cooling appliances and other items in new homes are eligible for $1,000 or $2,000 per dwelling unit, depending on the degree of energy efficiency.

(Home buyers need to ask the builder if they will get the credit.)

--- A tax credit of $50 -175 per appliance will also be available for makers of energy-efficient dishwashers, clothes washers and refrigerators manufactured in the U.S. in 2006 and 2007. A total of $75 million per manufacturer spread over two years is possible, but the manufacturers have to make more of the energy-efficient appliances than they do now to get the credit.

(We’ll see if they pass it on to consumers.)

--- The amount of ethanol blended with gasoline will increase from 4 billion gallons in 2006 to 7.5 billion gallons in 2012.

--- More monies will be given to research and commercialization of bio-ethanol The bill provides $200 million yearly until 2015 to boost production of bio-based fuels and develop a broad range of bio-based products that replace petroleum-based products.

That’s just some of the little stuff in the bill. Most of the tax breaks, incentives and hand-outs go to fossil fuels and nuclear power. There’s also new reliability standards for the nation’s power grids and daylight savings time will be extended by 4 weeks.

Will the bill provide any relief at the pump, cut greenhouse gases, improve air quality, or lessen our reliance on imported oil and natural gas? No. Not soon. If ever.

(Actually the bill aims to INCREASE our dependence on imported natural gas.)

However, take any tax break that’s offered, plan any purchases ahead and check with your tax accountant or retailer to see what may be available.