The 15-Minute Tip: Tracking Energy-Saving Tax Breaks

NEW YORK – You read or hear something almost every day about "going green" and how it will save energy costs. You also hear a lot about tax breaks: new breaks, new rules, solar credits, hybrid credits, state rebates, utility rebates. It's enough to make your head spin.

Too much stuff — and too much change. Impossible to plan a logical energy saving strategy. Right?

Right.

I've written a lot about energy and energy savings and will keep doing so since readers of my book, "The Millionaire Zone," and the many who have emailed me are investors and entrepreneurs looking for smart options.

For now I want to summarize the latest on key energy tax breaks and offer two resources where you can track developments on your own.

Hybrid credits going away?

Unless Congress acts soon, many of the popular federal hybrid vehicle tax credits are soon to go smaller — or go the way of $1-a-gallon gas altogether.

Toyota has been so successful selling its hybrid vehicles that credits for the popular Prius, Camry, Highlander and upscale Lexus RX400h, already diminished, will expire completely on Oct. 1.

Honda has finally reached the 60,000 vehicle threshold, so the $2,100 Civic hybrid credit gets halved on Jan. 1. It announced plans to discontinue the Accord hybrid due to slow sales, but a new model scheduled for 2009 will also see reduced credits if things stand as they are.

So, if you're looking for a hybrid, and the tax incentive is an important part of your equation, act soon.

The good news: the new Mazda Tribute hybrid, essentially the same as the Ford Escape hybrid, recently qualified for a $3,000 credit (2WD) or $2,200 (4WD). Mazda is considered a separate manufacturer, so has a long way to go to hit the 60,000 ceiling. These credits should be around for a while.

Federal tax incentives

There are some 15 bills in Congress in various stages of debate. They overlap, and it's hard to track them all (if you want to try, look at civic informant site congress.org and search on "energy") Here are some highlights we may see:

Change to alternative minimum tax rules to allow hybrid credits to offset AMT (currently they don't) Larger and extended tax credits for solar heating and hot water systems Energy economy standards for home appliances

No more 6,000-pound SUVs

Small-business owners, take note.

One of the most energy-inefficient laws on the books allows small-business owners to accelerate their first-year write off up to $25,000 of a business vehicle purchase — if that vehicle exceeds 6,000 pounds. It's known in the trade as the "Section 179" provision.

Congress wised up, and starting in 2008, the bar is raised to 14,000 pounds (a real truck). The deduction drops to $2,960 for the others.

An energy saving streetcar named DSIRE

One of the best resources I've found to size up not only federal but also state and local energy-savings programs is the awkwardly named Database for State Incentives for Renewables & Efficiency. The name is awkward, but the acronym works — "DSIRE."

Developed by the North Carolina Solar Center (a project of the N.C. State engineering school) and funded in part by the U.S. Department of Energy, the site has the clearest state-by-state tabulation of existing energy programs.

Spend 15 minutes shopping DSIRE, and you're bound to find a program at the federal, state or local level that works for you.

Peter Sander contributed to this article.