Sun Jul 31, 2005 -

Update from Terry Clark:

The National Energy bill that has already been passed by both the House of Representatives and the Senate is expected to be passed into law this coming week by President Bush. While the main body of the bill deals with the expansion of energy production, there are some hidden gems in there that could save you hundreds of dollars while you also conserve energy at home and with your car. The tax breaks will take effect January 1, 2006 so you have some time to plan to make sure you get the most from the breaks being offered.

If you have been thinking of making energy efficient upgrades to your home, waiting a few more months may make sense. The bill allows up to a $500 tax credit for money spent on energy improvements to your home. This includes a up to a $300 credit for installing a new highly efficient central air conditioner, heat pump or water heater. Installing energy-efficient windows could be worth up to another $200 in credit.

Those that decide to go solar or to upgrade can also get some tax money back from the government. If you purchase a solar-powered water heater or any fuel cell equipment for your home, the bill allows for a 30% tax credit, or up to $2,000.

For those that need to purchase new appliances, it may also be worth waiting a few months before doing so since the bill will likely mean lower prices for energy efficient appliances. While there are no tax breaks for consumers directly, there are tax breaks in the bill for manufacturers of energy efficient washers, dryers and refrigerators. The result should be more availability of these high efficient appliances at lower prices.

Hybrid and alternative fuel cars also will enjoy a number of new tax breaks. If you are planning on purchasing a new hybrid or diesel car, waiting until the new year will make you eligible for tax breaks worth between $500 and $3,400 depending on the car's fuel efficiency. Alternative fuel cars such as hydrogen and electric will be eligible for tax breaks of up to $8,000.