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The nation's most comprehensive new set of energy
regulations in more than a decade will give consumers
nearly $800 million in home-energy tax breaks
beginning in 2006.
Officially dubbed the "Energy Policy Act of 2005
(EPACT)", the new regulations establish the nation's
energy policy for the foreseeable future.
With the price of oil appearing stuck above the
$60-a-barrel level, President Bush was expected to
sign the measure into law at a ceremony in
Albuquerque, NM on Monday, Aug. 8. Congress passed the
measure last week.
The first national energy policy overhaul since 1992
touches on virtually every conceivable facet of
energy, including the production of fossil fuels,
nuclear power and renewable energy as well as utility
mergers, petroleum markets, new energy facilities and
energy conservation.
Beginning in 2007, daylight-saving time will become a
month longer running from the second Sunday in March
to the first Sunday in November. With an estimated 1
percent savings in household energy bills, consumers
are expected to feel a bit sunnier.
A better deal than emotional bliss, however, is cash
on the barrel head, and along with tax incentives for
businesses, Congress has also given consumers almost
$800 million in home-energy tax breaks beginning next
year.
According to the Department of Energy, with $874
million earmarked for drivers who buy alternate-fuel
vehicles over the decade, EPACT's benefits for
consumers' households include a host of tax credits.
Tax credits, by the way, are deducted from the amount
of tax you owe
They include:
* Tax credits topping out at $500 in 2006 and 2007
for money spent on existing homes to upgrade heating
and air conditioning systems, insulation, windows,
doors and thermostats, caulk leaks, install pigmented
metal roofs and otherwise put the bite on energy
waste. The write-offs break down with a maximum tax
credit of $200 for windows, $300 for air-conditioning,
heat pumps and water heaters, and $150 for
installation of a highly efficient furnace or boiler.
* The day President Bush signs the new law,
contractors who build new energy-efficient houses can
claim a new tax credit worth up to $2,000. Appliance
manufacturers get similar tax credits for engineering
more energy-efficient appliances to meet 2007 Energy
Star standards. While builders and appliance makers
aren't expected to pass their tax break onto
consumers, some indirect benefit should come in the
form of lower energy bills.
* Homeowners who install solar energy systems can
claim a tax credit of up to $2,000 for hot water and
power generating systems not used to heat swimming
pools and hot tubs. Smaller credits are available for
fuel cell and photovoltaic power sources. California
and some other states and jurisdictions have similar
tax credit or rebate deals already in place.
* Consumers who park alternative- and clean-fuel
burning cars can receive tax credits worth from $1,700
to $8,000 or more. The existing credit for electric
cars was extended beyond 2006 when it was due to
expire.
* Entrepreneurial consumers can also claim a 30
percent credit for the cost of installing clean-fuel
vehicle refueling property used in a trade or business
of the consumer or installed at the principal
residence of the taxpayer.
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