We are running out of oil, our main form of energy now. There are promising technologies and alternatives coming tomorrow.
There are numerous tax incentives and rebate programs for using less energy. The most immediate one is for those of us who purchased hybrid vehicles in 2005 (and earlier); depending on the vehicle, you can take a deduction of up to $2,000 off your income, even if you don’t itemize deductions. Depending on your tax bracket, this could reduce your tax bill by about 1/3 of this amount (around $660) this year.
Procrastinators rejoice, in 2006 the energy bill includes a tax credit for hybrids up to $3,600. A credit is subtracted from your total tax, not from your gross income, so it’s an actual dollar savings.
These incentives are interesting in several ways. The obvious is that we consumers have additional motivation to move towards energy efficient vehicles. But this works for the manufacturers too; any additional cost associated with making more efficient engines is offset, making them more attractive to buyers. And this is a pretty significant amount of money, after the credit the total cost will be reduced from $23,000 to around $20,000, or about 13% savings. People have been waiting to take delivery and the long wait for hybrids which has abated recently, is growing again.
Another interesting aspect is that the credit is indexed to the fuel economy of comparable non-hybrid vehicles. So let’s say you own a