Geothermal

Geothermal

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

Great news for homeowners who are planning on installing geothermal heating and cooling in their homes!

The Bipartisan Budget Act of 2018, signed in February 2018, reinstated the tax credit for fuel cells, small wind, and geothermal heat pumps. The tax credit for all technologies now features a gradual step down in the credit value. 

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.

Geothermal heat pumps

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2021.
  • The geothermal heat pump must meet federal Energy Star criteria.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Taking advantage of these tax incentives is a smart way to make your money go further and add clean energy to your home.

Rebates & Financing

And the incentives don’t stop at the federal level.  Many states have tax rebates and incentives of their own. 

For example,  Energize CT offers rebates of $500 to $1500 for qualifying systems.  For more information, visit: https://www.energizect.com/your-home/solutions-list/geothermal-heat-pump-rebates

The state of New York also offers the following:

  1. Small systems—those installed in single-family residences and those that use 10 or fewer tons of cooling capacity—are eligible for rebates of $1,500 per ton of cooling capacity.
  2. Large systems—those installed at non-single family residences that are more than 10 tons of cooling capacity—are eligible for rebates of $1,200 per ton of cooling capacity.

For more information on incentives in NY visit: https://www.nyserda.ny.gov/All-Programs/Programs/Ground-Source-Heat-Pump-Rebate

For information on low interest financing for your geothermal project in CT visit: https://ctgreenbank.com/programs/special-offer-heat-pump-financing/

For information on low interest financing for your geothermal project in NY visit: https://www.nyserda.ny.gov/All-Programs/Programs/Residential-Financing-Options

Are you ready to start a project?

Speak with one of our experts today!