Volatile energy prices and environmental concerns are raising awareness of  -and interest in- green technologies. Now, "going green" can also help reduce your taxes. The Energy Improvement and Extension Act of 2008* includes many energy-related tax breaks for individuals and businesses.

Solar Power- Since 2006, homeowners who installed qualified solar water heating systems and photovoltaic systems to produce electricity have been eligible for tax credit. The Energy Act extends the credit through December 31, 2016. In addition, the $2,000 credit limit no longer applies after 2008, and the credit may be used against the alternative minimum tax (AMT). The business credit for solar energy property has also been extended through December 31, 2016.

Wind Power- Small wind turbines placed in service through 2016 are also eligible for a tax credit. The credit applies to residential and commercial installations and, like the solar energy credit, may be used to offset the AMT.

Geothermal Power- Effective for periods after October 2, 2008, for tax years ending after that date, the Energy Act expands the business energy credit to include a 10% credit for geothermal heat pump installations.

Energy efficient homes and commercial property- The business credit for the construction of qualified new energy efficient homes has been extended and will be available for homes acquired in 2009. In addition, the new law extends through 2013 the deduction for the cost of "energy efficient commmercial building property" installed as part of a building's envelope; interior lighting systems; or heating, cooling, ventilation, and hot water systems.

Green Vehicles- Tax credits have been available for several years on the purchase of IRS-qualified hybrid, alternative fuel, and fuel cell vehicles. Recently, certain vehicles with advanced lean-burn technology were added to the credit-eligible list. The Energy Act adds another category: qualified plug-in electric vehicles. The new credit for plug-ins (both light and heavy duty) is effective for purchases after 2008 and before 2015.

Bicycle Power- Starting with the 2009 tax year, employers can reimburse employees who regularly bike to work up to $20 a month. The benefit is tax free, and employees can use the money to buy, improve, repair, or store their bicycles.

*The Energy Improvement and Extension Act of 2008 is part of the broader financial rescue package (P.L. 110-343) enacted in October.