Geothermal Incentives & Financing
Cost Advantages
- Competitive on initial costs
- Lower lifecycle costs than most HVAC systems
- Savings of 25-50% on energy consumption
- Lower peak demand, which lowers operating costs
- Water is heated with waste heat from air conditioning at no cost in the summer and at a substantial savings in the winter
Environmental Advantages
- Conserve natural resources by providing efficient climate control, which lowers emissions
- Minimize ozone layer destruction by using sealed refrigeration systems, which seldom or never have to be recharged
- Use underground loops to transfer heat, with no external venting and no air pollution
- Very energy-efficient, with the earth providing more than 70% of the energy required to heat and cool
New Tax Incentives for Geothermal Systems
Geothermal heat pumps (GHPs) can be added to existing buildings and can be made more affordable through tax credits and financial assistance.
Residential Tax Credits: Homeowners are eligible for a 30% tax credit for ENERGY STAR-rated GHPs that are in service by Jan. 1, 2033, with the credit phasing out by 2034.
Commercial (Business) Information: Federal tax credits aim to encourage upgrading or planning for GHP systems in commercial buildings, with base tax credits of 6% scaling down to 4.4% in 2034, and potential bonus credits for specific project requirements.
Energy Assistance for Agricultural Producers and Rural Small Businesses: The U.S. Department of Agriculture’s Rural Energy for America Program provides guaranteed loan financing and grant funding for renewable energy systems or energy efficiency improvements.
Additional Resources: Both the Database of State Incentives for Renewables and Efficiency and the DOE’s State Energy Offices and Organizations page offer information on state-level renewable energy incentives, including tax credits, grants, and rebates. White House resources are also available to help Americans understand how the Inflation Reduction Act (IRA) impacts them.
For more details, you can visit https://www.energy.gov/eere/geothermal/tax-credits-incentives-and-technical-assistance-geothermal-heat-pumps.