Homeowners also would get a 30%tax credit for eight additional years for the cost of installing solar equipment. Homeowners could claim a tax credit of up to 10% of the cost of all qualified energy efficiency improvements, such as insulation, replacement windows, water heaters and heating and cooling equipment. To reduce demand for petroleum, the bill creates a tax credit for plug-in electric cars, whose buyers will get a tax break of from US$2,500-$7,500, depending on battery capacity of the vehicle.

Japan, the world's biggest supplier of solar cells, has watched domestic solar power demand dry up after it pulled the plug on subsidies in March 2006, hurting solar equipment firms' ability to invest in research and expansion abroad. The METI panel on new energy sources estimated that it now costs 2.3 million yen (US$21,330) to install a 3 kilowatt solar power system for a home. In the year that ended in March 2006, a household with such a system would have received 60,000 yen from the state.