Alternative Energy Incentive Act of 1979

Alternative Energy Incentive Act of 1979 - Amends the Internal Revenue Code to increase to 50 percent the rate of the income tax credit for residential energy conservation expenditures and for renewable energy source expenditures. Increases the amount of renewable energy source expenditures eligible for the credit to $10,000. Eliminates the requirement that such expenditures be limited to the taxpayer's principal residence. Qualifies expenditures for the drilling of an onsite well drilled for any geothermal deposit for the renewable energy source tax credit. Qualifies renewable energy source property which is also a structural component of a building for the energy tax credit.

Permits lessors, lessees, and builders who are not the original users of property to claim a residential energy credit. Permits taxpayers, upon application to the Secretary of the Treasury, to claim an immediate tax credit for the taxable year previous to the year in which energy conservation expenditures are made.

Provides a residential energy credit for heat pumps which replace an electric resistance heating system.

Extends the termination date of the residential energy tax credit to December 31, 2000.

Increases the investment tax credit for: (1) hydroelectric and cogeneration energy property; (2) solar and wind energy property; (3) geothermal energy property; (4) biomass property; (5) ocean thermal energy conversion property; and (6) utilities. Makes the credit for such properties refundable.

Repeals the exemption from excise tax for gasohol. Allows an income tax credit for the use of gasohol. Bases the amount of such credit on the volume of alcohol mixed with gasoline.