The Barton-Domenici Energy Policy Act of 2005, signed into law by U.S. President Bush on August 8, is being lauded by the Association of Home Appliance Manufacturers (AHAM) and its members as the most significant energy-efficiency legislation since the National Appliance Energy Conservation Act of 1987 (NAECA). Among the many provisions of this important legislation are manufacturing tax credits for the production of super-efficient appliances in 2006 and 2007.
The manufacturers tax credit provision, originally introduced by U.S. Senators Charles Grassley (R-IA), Blanche Lincoln (D-AR), Gordon Smith (R-OR), and Representative Jim Nussle (R-IA), provides for the acceleration of energy-efficient appliances into the marketplace by offering a tax credit for the production of super energy-efficient washers, refrigerators, and dishwashers. Increased sales of these products will result in significant energy and water savings for the U.S.
The manufacturers tax credit applies to U.S. produced appliances, a provision added by the Congress to promote domestic manufacturing.
The estimated energy savings of the tax credit over 20 years is nearly 0.6 Quads, the equivalent of the energy consumed by 18 coal plants in one year. The credit would also result in a water savings of more than 1.2 trillion gal -- the amount used by a city the size of Phoenix, AZ, U.S. for 2 years.
The tax credit was supported by major environmental and energy advocacy groups as well as AHAM as an effective and innovative way to encourage appliance producers to get more of these high efficient products produced and into the market.
Other AHAM-supported provisions included in the Act include a 9-month lead time before a new Energy Star specification can be issued and a provision for the U.S. Department of Energy (DOE) to match state rebates for Energy Star products. Also included is a provision authorizing the DOE to consider stand-by power in future energy standards, but integrated and consistent with the priorities, procedures, and criteria in current law. New consensus federal minimum efficiency standards for both dehumidifiers and commercial clothes washers were incorporated into this law, thereby avoiding conflicting state requirements.
“We are very pleased with the enactment of the energy bill," stated Joseph M. McGuire, president of AHAM. "Our members and staff worked over the past 5 years with a broad coalition of manufacturers and energy advocacy groups to achieve this goal. The results are targeted incentives for efficiency and balanced regulatory provisions.”
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