Alternative Energy Source and Conservation Tax Incentive Act of 1979

Alternative Energy Source and Conservation Tax Incentive Act of 1979 - Amends the Internal Revenue Code to change the formula for computation of the residential energy tax credit for individuals to increase the maximum amount of such credit from $2,200 to $3,000. Extends eligibility for such credit to: (1) a landlord for installation of alternative energy equipment on rental residential property; and (2) a builder for installation of such equipment in a house built for sale (reserving such builder the option to pass such credit through to the first purchaser). Applies such credit to lease payments on such equipment (so long as the lessor certifies that he has not taken the credit himself). Allows owners of various residences to take such credit for a prorated share of the costs of jointly purchased equipment. Permits a homeowner to file an amended return for his previous taxable year and receive such credit against the previous year's taxes for eligible energy expenditures in his current taxable year.

Extends the tax credit for photovoltaic systems to homeowners.

Revises the eligibility for such credit of the costs of drilling geothermal wells (but only if no deduction is taken for intangible drilling and development costs).

Extends coverage of the ten percent business investment tax credit to all solar and wind energy property, including structural modifications and components. Allows an additional 20 percent energy investment tax credit for solar, wind, and geothermal expenditures. Makes hydroelectric properties (other than dams) eligible for such additional 20 percent credit. Makes wind-powered mechanical energy eligible for both credits.

Makes utilities and private enterprises eligible: (1) for the additional 20 percent credit for purchase and installation of all wind and solar equipment; and (2) for a further ten percent credit for purchase and installation of cogeneration equipment.

Makes heat pumps eligible for the 15 percent residential conservation credit and the ten percent energy tax credit for business.

Extends the expiration date for such credits through fiscal year 2000.

Increases the current four cents per gallon to a 40 cents per gallon exemption from the Federal special fuels diesel and gasoline excise taxes for each gallon of alcohol sold in an alcohol-gasoline (gasohol) mixture. Extends the expiration date of such exemption through fiscal year 2000. Allows a credit against income tax for any amount in excess of the excise taxes refunded or credited pursuant to such exemption.

Requires the Secretary of the Treasury's annual gasohol report to Congress to include: (1) a calculation of the need for continued gasohol incentives (and the appropriate level); and (2) a comparison of the cost of alcohols produced from corn, wheat, wood and other substances.

Allows van pools operated by non- employers (third parties or owner-operators) to take the same ten percent investment tax credit currently available to employers only.