How You Can Save Money and Energy With the New Plug-in Electric Hybrid Car

A new prototype hybrid car was revealed by Pacific Gas & Electric Co. Not only does it save on gas, but it can be used to power homes and businesses during blackouts or during hot summer days when energy prices soar.

In addition to reducing energy cost, V2G technology will allow consumers to be able to sell back energy to the utility during the hot summer months when energy demand is the highest. Hybrid vehicle owners may sell energy at the price threshold they select. When the price reaches this point, the utility will automatically take energy from the vehicle. The owner will have enough energy left over for the drive home. Payment to the vehicle's owner can be made in the form of earned credits from the amount of energy used by the utility toward their monthly energy bill.

V2G technology can increase the availability of renewable energy used during peak energy hours. Plug-in electric hybrid vehicles (PHEVs) may charge their batteries at night when energy is inexpensive and is generated with a larger percentage of renewable resources. While electrical utilities usually have to buy power from expensive, less efficient, fossil fuel power generating sources during the day or times of maximum demand. But with PHEVs, utilities may purchase the renewable energy stored in the vehicle batteries.

PG&E demonstrated the first-ever utility Vehicle-to-Grid (V2G) technology at Silicon Valley Leadership Group Alternative Energy Solutions Summit in California. The PHEV, a converted Toyota Prius, featured a 180 pound lithium battery that takes up the bottom of a back trunk where a tire would go. The vehicle produces about 9 kilowatts of electricity while the average house uses about 2.5 kilowatts of electricity on hour.

The PHEVs charge by plugging into a three-prong 110- to 120-volt outlet. Flipping a switch sends the charge to the home from the car, if the home needs energy during a blackout or high energy consumption days.

For the demonstration, the Prius ran several lights and appliances after reversing the flow of energy from the outlet to the vehicle.

The plug-ins, like the traditional hybrid, have both electric motors and batteries as well as a gasoline engine which turns on when the car runs about 20 to 25 miles per hour.

A plug-in hybrid vehicle with its larger battery, uses its gasoline engine less often and gets about 100 miles per gallon. In contrast, a 2007 Toyota Prius reaches about 55 miles per gallon in combined city and highway driving.

PG&E officials did not release a timeline of when V2G hybrid cars would be available to the general public. Since the auto industry is not yet increasing production of electric vehicles which require larger batteries, the PHEVs are not likely to be produced before 2012.

What this means to you, is that you will have way to turn your vehicle into a power storage system that will conserve energy and reduce dependence on foreign oil.

Does Your Hybrid Vehicle Qualify for Full Tax Credits?

Not all 2007 tax credits for hybrid vehicles are the same, even if the taxpayer bought the same car. How is that possible?

The 2005 Energy Act providing tax credits for new hybrid vehicle owners include qualifications that the owners must meet. Some of the qualifications such as the following are clear cut.

1. The vehicle must be bought on or before 12/31/10 and driven or used after 12/31/05.

2. The tax credit may be claimed only by the original owner of the new hybrid. A preowned or used hybrid vehicle does not qualify for the credit.

3. In order to take advantage of their credit, some first time owners of hybrid vehicles might have to recapture their tax credit if they resell their hybrid car or truck.

4. The vehicle must be driven mainly in the United States.

5. If a hybrid vehicle is leased, the leasing company has the right to claim the tax credit, as the credit is only available to the original purchaser of the hybrid vehicle.

So far the hybrid owner only needs to take basic precautions. But the Energy Act goes farther and places other qualifications to consider such as the date of purchase and number of hybrids sold per car manufacturer.

The number of hybrids is limited by 60,000 hybrids per car manufacturers that may be claimed for taxes. Two hybrids that have met the 60,000 mark in June 2006 are Toyota and Lexus hybrids. Buyers who purchased their Toyota hybrid or Lexus hybrid before October 1 will have 100 percent of their tax credit. While buyers who purchased their hybrids on or after October 1 will have a tax credit that is reduced by 50 percent.

That means that some buyers of a new Prius or Lexus hybrid vehicle will qualify for the full $3,150 tax credit. While other buyers of the same vehicle will receive only a $1,575 tax credit. Therefore, the amount that the taxpayer may claim is not only based on the amount the vehicles qualifies for but also is based on the date the hybrid was purchased.

It should be noted that the tax credit will not last forever, but will be phased out by 2010. This is hurried along by reducing the amount of tax claims until it is gone.

For example, after 60,000 vehicles are sold, the taxpayer may claim the full amount of credit for that first quarter. For the second and third quarter after 60,000 vehicles are sold, the taxpayer may claim half or 50 percent of the tax credit. During the fourth and fifth quarter, the taxpayer may claim 25 percent of tax claim. After the fifth quarter the 60,000 vehicles are sold, no tax credit may be claimed.

A further limitation in claiming a tax credit is based on the type of vehicle purchased. This involves the amount of reduced emissions and fuels saved by the said vehicle. Only the type of vehicle is considered. Price is not a factor. You would guess that the more expensive hybrids would bring a higher tax credit. But, this is not always the case. For example, a $40,000 Lexus RX 400h hybrid commands a maximum of only a $2,200 tax credit.

Another consideration in limiting tax credits is the Alternative Minimum Tax (ATM), which may disqualify some other taxpayers.

Other hybrid manufacturers such Honda, Ford, GM have not meet the 60,000 limit and still qualify for the full amount. You do not have the same considerations, at the present time, that others such as Toyota hybrid owners must contend with.