President Bush Signs Energy Policy Act of 2005;
Offers Consumer Tax Credits

Here is a brief summary of energy efficiency tax credits in the Energy Policy Act of 2005:

Alternative Fuel Vehicles
The Act includes a vehicle tax credit worth $250 to $3,400 for hybrid or diesel vehicles (depending on the vehicle’s fuel economy). The hybrid credits are available, beginning in 2006, for up to 60,000 vehicles from each auto manufacturer, with the tax break phasing out over the year after the cap is met.

Home Improvements
The Act includes a home tax credit with an overall cap of $500 to reimburse homeowners for the following eligible expenses:

• 10 percent of the cost of energy-efficient insulation, doors, and/or Energy Star pigmented metal roofs;
• 10 percent, up to a cap of $200, of the cost of energy-efficient windows;
• up to $300 of the full cost of a highly-efficient central air conditioner, furnace, heat pump, or water heater;
• up to $150 of the full cost of a highly-efficient furnace or boiler; and
• up to $50 of the full cost of a furnace with a highly-efficient fan.

The home improvement credits are available in calendar years 2006 and 2007.

Home Appliances
The Act includes tax credits for manufacturers of energy-efficient appliances, which could be passed along to consumers in the form of lower prices for the products. The tax credits include:

• $75-$175 per refrigerator, depending on efficiency;
• $100 for clothes washers that meet the Energy Star criteria (effective 2007); and
• up to $100 for dishwashers, depending on Energy Star criteria that are yet to be determined.

The Alliance has a detailed analysis of the energy-efficiency provisions in the new energy law. See Alliance statement on new energy law--click here for the news release.