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Solar Tax Credit – Save Money, Save the Earth

You should get credit for buying solar, and the government agrees!

You can get credit for buying solar on form 3468, line 2b. Below is an example of the breakdown for that credit*:
Solar Panel=$2,700.00
Batteries=$   600.00
Total=$3,300.00
 
Total on line 2b of IRS Form 3468 is
$3,300.00 x 30% = $990.00.
Total savings will vary depending on additional allowances provided by each state. Check with your particular state for these allowances.

* Based on purchase of a Cruise Car Solar Sunray SX2.
 

Helpful Link

Use the following link for general instructions and the 3468 form:

http://www.irs.gov/pub/irs-pdf/f3468.pdf
 Most people in today’s age have heard about solar power. And most everyone understands the benefits of conserving energy...from the value to the earth to the added value in your wallet.

But not many people understand how solar power works. Not many people know that there are state and federal tax credits for purchasing solar-powered vehicles.

More importantly, not many people know that there’s a solar-powered vehicle that’s stylish, practical and affordable. Cruise Car is here to change all that...


Solar-Electric Hybrids

As the only supplier of solar-electric hybrid vehicles in the United States, Cruise Car Inc. is often asked when it makes sense to purchase a solar-electric hybrid for business use or as a second vehicle. There are a wide variety of factors, both economic and environmental, that must be considered in answering this question. A quick overview of the progress that has been made by the automotive industry to control contaminant emissions is a good place to start.  Over the past 50 years, vehicle manufacturers have continually produced more sophisticated emission control systems to reduce harmful tailpipe discharges. Fuel, ignition and exhaust designs have all been modified to dramatically reduce emissions of hydrocarbons, carbon monoxide, and oxides of nitrogen, the primary chemicals linked to smog. In response to growing concerns over CO2 emissions and global warming, recent efforts have been focused on improving fuel economy using electronic fuel injection, computerized engine control systems, and gaselectric hybrids. Design efforts have also focused on the production of zero emission vehicles (ZEVs), many powered by electricity stored in batteries. Due to inherent power limitations of available batteries, current designs of electric vehicles have been categorized as low speed vehicles (LSVs) or neighborhood electric vehicles (NEVs) due to their limited speed (<25 mph) and range (<50 miles). These vehicles are not technically zero emission vehicles because the power plants producing the electricity still discharge CO2. Solar electric hybrids represent the next step in the advancement of zero emission vehicles. By charging the battery with the sun’s energy, the goal of zero emissions comes closer to reality.  Understanding the advantages and disadvantages of solar-electric hybrids to NEVs, gas-electric hybrids and fuel efficient vehicles is crucial in assessing when a solar-electric vehicle is the right choice. Towards this end, Table 1 was prepared to present the environmental benefits and cost of ownership of a Toyota Camry, a Toyota Camry Hybrid, an NEV produced by Chrysler called a GEM e2 and a solar electric NEV produced by Cruise Car called the Sunray. The comparisons begin by assuming the vehicles will be driven either 1,000 or 5,000 miles per year, and progress by estimating the capital and operation and maintenance costs along with the resulting CO2 emissions. The footnotes on the last page provide documentation for all assumptions used in preparing this table. 2 of 4

Initial Costs and Capabilities

Reviewing the initial costs, it is quickly evident that NEV’s are much cheaper to purchase. Both the GEM and the Sunray are less than $8,000, while the Camry and Camry Hybrid list for $20,000 to $25,000. At $7,700 and $7,900, capital costs for the GEM and Sunray are approximately the same. However, because the Sunray is a solar-electric hybrid, its solar portion qualifies for a $1,000 tax credit, which makes the net capital cost of the Sunray about 10% less than the comparable GEM. Range is the obvious limitation of the NEVs. The miles/Kwh assumed for the GEM and Sunray come from a report prepared for the California Energy Commission (CEC) and represents a realistic estimate of performance under average driving conditions. It should be noted that chargers are available (for $3,000 to $9,000) that effectively extend the range by allowing the batteries of the NEVs to be 80% recharged in 1-4 hours. The range of electric vehicles is significantly impacted by the terrain. For example, the Sunray can travel over 50 miles on flat terrain, but will average 34 miles based on the CEC findings. The additional range of the Sunray compared to the GEM reflects the additional power from the solar panels, which on a summer day can add an additional 5 miles. Speed limitations are the other limitations of NEVs. Under federal law, NEVs have a maximum speed of 25 mph and are not allowed to travel on public roads with speed limits greater than 35 mph. Thus if your second vehicle driving needs will routinely require travel on 40 mph or greater roads, NEVs would not be a good choice. GEM e2 versus the Sunray A comparison of GEM e2 and Sunray annual operating costs shows that the Sunray is approximately 20% less expensive to operate than the GEM e2. These savings are directly related to the following factors:

The availability of a 30% federal tax credit for the solar portion of the Sunray

The initial and replacement battery costs for the Sunray are less

The solar charging of the batteries extends the useful life of the batteries

The solar charging of the batteries reduces the electrical demand

The value of solar power is particularly apparent in the 1,000 mile per year scenario, where total fuel charges (i.e. electrical bill) for the Sunray are estimated at only $8 per year, and the total fuel, battery and maintenance costs are only one third those of the GEM.

Environmental Factors

Table 1 includes estimates of the total pounds of CO2 discharged per year. These estimates have been graphically displayed on the right. Using the 5,000 mils per year scenario, the Camry Hybrid will discharge approximately 900 pounds of CO2 less than the regular Camry. However,the average NEV CO2 emissions will be approximately 1500 pounds less than the Camry Hybrid. These estimates are based on the average CO2 emissions per kwh from US power plants in 2000 and would vary regionally depending on the percentage of fossil fuels used for power generation. Because the Sunray derives a portion of its power from solar energy, CO2 emissions are less than the from the GEM e2. The difference on a percentage basis becomes greater as the number of miles driven decreases. At 1000 miles per year, Sunray CO2 emissions will be approximately one third of the GEM e2emissions.

When Choosing a NEV Makes Sense

Clearly there are economic and environmental advantages to selecting a NEV for business use or as a second or third car. Significantly lower CO2 emissions and potential savings of up to $4,000 a year have been demonstrated in the preceding sections. Persons or corporations considering a NEV must first determine if they can routinely utilize the NEV on roads with speed limits of 35 mph or less and a daily travel distance of less than 30 miles. If not, then a NEV is not the right choice. However, for large corporate or institutional campuses or people living in downtown areas, on private roads, or retirement communities where routine NEV use is a viable option, a NEV supplemented with an occasional car rental may provide an ideal solution. Cars can typically be rented for $25 to $50 per day, so a $4,000 a year NEV saving could be used for 80 to 160 days of rental car usage. Rent a pick-up for hauling, a van for transporting guests or a convertible for a romantic weekend getaway. NEVs let you get more bang for your transportation buck while helping to fight global warming. In addition to being fun to drive and easier to park, many states/communities now have free parking for zero emission vehicles.

Electric versus Solar-Electric

Solar-electric vehicles represent the next step toward the goal of zero emission vehicles, replacing CO2 emissions from power plants with pollution free power from the sun. Federal tax credits and battery/electrical savings from the solar panels make the cost of ownership of a solar electric vehicle about 20% less than a regular NEV. Cruise Car Inc. offers a wide variety of solar-electric vehicles to choose from, starting with the 2 seat Sunray to a 14 seat Kudo. They also offer conversion kits to turn your existing golf cart into a solar-electric vehicle. Power from the solar panels comes with a 25 year warranty, so the panels/tops can be reused on future vehicle purchases.Capital Cost (a) Capital costs represent the manufacturers suggested list price excluding taxes, insurance, and registration and delivery chargesSolar Tax Credit (b) A 30% tax credit is available for the solar portion of the solar-electric vehicle, which includes the solar panel, batteries and charge controller. This credit is currently set toexpire on December 31, 2008.Net Capital Cost (c) The net capital cost is the capital cost minus the tax creditMiles/Gallon or KWH (d) The miles per gallon for the Camry and Camry Hybrid is the average of the EPA estimated mileage for city and highway driving. The miles per kwh for the GEM and Sunray come from a July 1, 2002 report prepared for the California Energy Commissiontitled “Demonstration of Neighborhood Vehicles (NEVs)”.Range (Miles) (e) The range for the Camry and Camry Hybrid is simply the fuel capacity (gallons) times the miles per gallon. For the GEM and Sunray, the range is the battery capacity (in Kwh) times the miles per kwh referenced above. The range of electric vehicles is significantly impacted by the terrain. For example, the Sunray can travel over 50 miles on flat terrain. The additional range of the Sunray compared to the GEM reflects the additional powerfrom the solar panels, which on a summer day can add an additional 5 miles to the range.Fuel (Gas-Electricity) (f) Fuel costs were based on an assumed gas price of $3.50/gallon and an electricity cost of $0.10/kwh.Maintenance (g) Maintenance costs for the Camry and Camry Hybrid are based on a 2006 report by AAA which showed maintenance and tire costs for a mid-size sedan to be approximately $0.06/mile. Because of the simplicity of power train and design of the GEM and Sunray, maintenance costs were assigned a value of $0.03/mile.Batteries (h) Battery costs for the Camry Hybrid, GEM and Sunray were obtained from the manufacturers. For the Camry, the annualized cost was obtained by dividing by the 8 year warranty period. For the GEM, a battery life of 3 and 4 years was assumed for the5,000 and 1,000 mile categories, consistent with the manufacturers published information. Sunray battery life was assumed to be 20% greater than the GEM to reflect the smaller battery draw downs resulting from solar recharging.Insurance (i) Insurance costs were based on the lowest quotes from three insurance companies for full coverage on public roads. Only one insurance agency (Allstate) had special rates for NEVs. NEV insurance drops to less than $100/yr for private road use only.Registration (j) Registration costs vary from state to state. This table assumes registration fees based on 1% of vehicle value. Depreciation (k) Vehicle depreciation of 10%-20% per year is generally regarded as a reasonable estimate. This table assumed a 10% per year depreciation based on age and the potential for an additional depreciation of 10% for 30,000 miles driven, pro-rated to the actual miles.Finance(l) Interest only charges on net capital cost at 7% interest Lbs CO2 Discharged (l) Estimates of CO2 emissions for the Camry were based 19.3 lbs of CO2 per gallon ofgasoline used. C02 emissions for the GEM and Sunray were based on the estimated kwhtimes 1.34 lbs CO2 per kwh. This number represents the average CO2 emissions per kwh in the United States from 1998 to 2000, as published in a March 2002 report prepared for the Energy Information Administration titled “Updated State and Regional Level Greenhouse Gas Emission Factors for Electricity”.