Aug 11 2005
President Bush signed the Energy Policy Act of 2005 into law on August 8th, setting in motion a process that will yield new tax incentives for consumers and businesses that pursue energy efficiency.
"Energy conservation is more than a private virtue; it's a public virtue," said President Bush. "And with this bill I sign today, America is taking the side of consumers who make the choice to conserve."
The energy act creates a total tax credit of up to $500 for energy efficiency improvements to your home, including credits of up to $200 for installing new exterior windows; up to $300 for installing a highly efficient central air conditioner, heat pump, or water heater; up to $150 for installing a highly efficient furnace or boiler; and credits for 10 percent of the cost of insulation, energy-efficient doors, and cool reflective roofs.
The credits will be available in 2006 and 2007.
DOE also anticipates possible consumer savings as a result of new tax credits for contractors who build energy-efficient homes and for manufacturers who make energy-efficient appliances. New energy-efficient commercial buildings will also earn a tax deduction. Buying hybrid electric vehicles and vehicles with cleaner burning diesel engines, known as advanced lean-burn engines, can earn you a tax credit of up to $3,400. The credit is largest for the vehicles that save the most fuel, but the credit will phase out shortly after an automaker sells 60,000 eligible cars. Tax credits of up to $4,000 are also available for alternative fuel cars.
Businesses can earn the same tax credits, as well as credits of up to $12,000 for buying large hybrid vehicles, such as buses, and up to $32,000 for the purchase of large alternative fuel vehicles. And although fuel cell vehicles are not on the market yet, the act also establishes tax credits for these vehicles.