Lower Your Bills While Conserving Energy and Tapping into Renewables
Shocked by your electric bill? Fuming over the latest pump prices? If you’re willing to put solar panels on your roof or a hybrid car in your driveway, you may be eligible for tax incentives and rebates on renewable sources of energy and related technologies.
Several forward-thinking states are stimulating consumer demand for alternative energy by offering cash back on photovoltaics, small wind turbines, fuel cells and solar thermal systems installed in homes. Likewise, a wide range of regional conservation incentive programs is taking root as utility deregulation continues to drive energy prices higher from coast to coast.
California residents, for example, can get rebates of up to $3,000 per kilowatt for installing an alternative power system. And the City of Los Angeles, in an effort to spur energy conservation, has been giving residential customers $4 back for every 50 kilowatt-hours of electricity saved.
California leads in renewables, although many states offer similar programs. In 1995, the nonprofit Interstate Renewable Energy Council launched the national Database of State Incentives for Renewable Energy (DSIRE). The database, which is accessible free via www.dsireusa.org, contains comprehensive information on state incentives (tax credits, grants and special utility rates) for renewable energy technologies. According to DSIRE, 16 states currently offer personal tax incentives for energy conservation, and 32 offer rebates on the purchase of renewable energy technologies.
In 23 states from Maine to California, homeowners with solar, wind or thermal energy generation systems can take advantage of net metering, whereby any excess electricity they produce is fed back into the larger grid, offsetting their electric bills accordingly. The utilities are required to allow independent power producers to interconnect with the grid, and the companies must purchase any resulting excess energy.
At the national level, Congress is considering a 15 percent federal tax credit—up to a maximum of $2,000—for homeowners who install solar panels on their property. Also, President Bush has asked for the extension of the present 1.7 cents per kilowatt-hour tax credit for electricity produced using wind and biomass.
The U.S. Department of Energy launched a pilot program to facilitate the installation of photovoltaic solar systems on one million rooftops across the country by 2010. By working with and providing funds to partners in the building industry, local governments, state agencies, solar industry, electric service providers and nonprofit organizations, federal officials hope to remove barriers and strengthen the demand for solar technologies.
Whether or not homeowners qualify for any specific incentive programs or rebates, they can finance the purchase and installation of renewable energy systems through home-equity loans. This strategy can bring down costs through tax savings, since interest payments on any mortgage loans are tax-deductible.
Hybrids Hit the Road
While millions of Americans continue to pay through the pump to fuel their hulking sport utility vehicles, a quiet revolution is percolating, thanks to rising consumer demand for hybrid cars, such as the Honda Insight and the Toyota Prius. These new vehicles combine electric and internal-combustion drivetrains under one hood and get up to 70 miles per gallon, while emitting significantly less toxic emissions than traditional cars.
Several state governments now offer tax incentives or rebates to persuade motorists to go hybrid. Maryland exempts buyers of hybrid vehicles from the state’s five percent titling tax, which translates into an annual savings of up to $1,500. Similar programs exist in Pennsylvania, Oregon and New York.
President Bush’s nascent federal energy plan calls for a 10 percent tax credit on the purchase of hybrids, which should spur consumer demand, especially as American automakers launch their own hybrid models in 2002. Bush also plans to extend an existing 10 percent tax credit (up to $4,000) on the purchase of electric vehicles that do not rely on gasoline at all but draw their power from rechargeable batteries, fuel cells or other portable sources of electrical current. Domestic and foreign car companies are working furiously to bring new qualifying models powered by hydrogen to the mass market as early as 2003.
Back in the 1970s, President Carter donned a sweater and urged Americans to help end the energy crisis by turning down the heat and driving less. Today, governments and consumers have many more options about how they can contribute while also benefiting financially.
RODDY SCHEER is a Seattle-based freelance writer and E‘s webmaster.