Benefits

• Tax credits are generally viewed as offering bigger financial benefits to consumers than tax deductions. This is because a deduction only allows the individual to take some fixed amount off his tax bill, while a credit lowers the total amount of his income that is subject to taxation. An additional benefit of making the energy-saving expenditures encouraged by the stimulus bill is a long-term reduction in the consumer's cost of powering a home or vehicle.
  
  

Home Improvements

• A tax credit of up to 30 percent, with a maximum of $1,500, is available to individuals who make certain energy-saving improvements to an existing home. For example, qualifying improvements could include installing energy-efficient windows and doors, upgrading wall insulation, or modernizing heating and cooling systems. To be eligible for the credit, however, homeowners are obligated to use only those building products or materials that meet specific performance standards defined in the 2009 law.
  
  

Alternative Energy Equipment

• Another way for individuals to qualify for the tax credit in the stimulus bill is to install certain types of equipment designed to power homes with renewable and/or alternative sources of energy. Examples of equipment encouraged by the law include solar hot water heaters, small wind turbines, residential fuel cells and geothermal heat pumps. However, consumers can claim the tax credit only for those equipment installations that are in place by Dec. 31, 2016.
  
  

Alternative Fuel Vehicles

• The stimulus bill offers tax credits for buying or leasing alternative fuel cars and trucks, including hybrid gas-electric vehicles, diesel vehicles with lean-burn engines and fuel-cell vehicles. New plug-in electric cars with at least four wheels and a rechargeable battery can also qualify. The minimum tax credit for these vehicles is $2,500, with a maximum that varies based on battery capacity and how many vehicles are sold by the manufacturer. Consumers can also get a credit of 10 percent of the costs of converting a traditional vehicle to plug-in electric drive, up to a maximum of $4,000, as long as the conversion is complete before Dec. 31, 2011.