To: Wharf Rat who wrote (1435 ) 8/2/2005 6:33:09 PM From: Wharf Rat Respond to of 24214 Energy bill offers rich rewards for hybrids By Chris Woodyard and Sandra Block, USA TODAY Some consumers will see a dramatic increase in tax breaks for buying gas-electric hybrid vehicles under an energy bill that has gone to President Bush for his signature. The provision is one of the money-saving goodies aimed at consumers who conserve energy. The bill also includes incentives for homeowners. But the feature that could cause the biggest stir is the hybrid tax credit. Consumers could slash tax bills by $1,700 to $3,000 depending on the model if they buy a hybrid starting Jan. 1, according to an analysis by the Union of Concerned Scientists, which backs the legislation. It's "not a home run, but a good, solid double" in the drive to save energy and cut air pollution, says the group's David Friedman. At present, buyers get a $2,000 income-tax deduction for purchasing a hybrid, which combines an electric motor with an internal-combustion engine to save gas. The deduction was due to fall to $500 next year. A credit is more valuable than a deduction because it represents a dollar-for-dollar reduction in a buyer's tax bill. The new energy legislation includes a bigger credit for hybrids that save the most fuel compared with 2002 models and those expected to conserve the most fuel over the life of the vehicle. It also applies to the new generation of fuel-saving diesel cars that are expected in the next couple of years, Friedman says. The break is due to expire at the end of 2009, but it could cease a lot sooner for some models. That's because of a provision that allows the tax breaks for just 60,000 vehicles from each automaker. Toyota expects to sell 100,000 of its high-mileage Prius hybrids this year alone but still supports the credit. "Hybrids only account for 1% (of new vehicle) sales, so there is still a need," spokeswoman Martha Voss says. She says Prius could qualify for at least a $2,400 credit. The bill "is meant to be a jump-start" to spur hybrid sales, says Dan Brouillette, a Ford Motor vice president. Ford makes the Ford Escape and Mercury Mariner SUV hybrids and has three more hybrid models on the wayusatoday.com