The crisis on Wall Street has effectively stopped funding for alternative energy projects.
But an even bigger problem has been the coming expiration of energy
tax credits for the manufacturing, production and use of alternative
energy systems and devices at the end of 2008. This situation has now
changed with the $18 billion Renewable Energy and Job Creation Act of 2008.
Although the House of Representatives still has to
approve this version of the bill, once they do the President has
indicated he would quickly sign it into law.
Here are some of the bill’s highlights:
- Tax credits for wind generation facilities would be extended through 2010.
- Tax credits for solar, geothermal, marine (tidal) and biomass,
municipal solid waste, trash combustion and hydro power plants would
last through 2011.
- Residential energy efficient property tax credits would run through
2014, and the bill allows for up to $4,000 of solar energy tax credits
for homeowners who install such systems.
Here’s one bound to get automakers excited: A new tax credit for the production - and purchase - of plug-in electric vehicles.
It’s been estimated that existing hybrid vehicles can be converted
to true plug-in hybrids for an additional $3,000 to $5,000, and this
credit might just be the catalyst that gets big automakers moving.
Felix Kramer, co-founder of CalCars.org - an organization which
promotes plug-in hybrid electric vehicles - thinks it will happen:
“This will have an enormous impact, and could conceivably entirely
remove the cost increment that carmakers say is the cause of their
reluctance to build plug-in vehicles.”
And car buyers come out big, too. If you purchase a plug-in car or truck, your credit could be as much as $7,500.
Other provisions of the bill provide tax credits for installing non-hydrogen alternative fuel refueling stations. Biofuels, anyone?
One provision even allows you to deduct your bicycle commuting
expenses from your gross income. Being a cyclist, I’m particularly fond
of that one.
The previous legislation was primarily focused on residential and
manufacturing credits for solar.
