Geothermal Tax Credits Up To 30%

Breaking News: JUST REINSTATED with Budget Bill passed Jan 2018
30% Federal Tax Credit For Geothermal

In addition to the great savings possible with Geothermal heating and cooling, there is now a 30% federal tax credit available. Beginning in late 2008, the federal government passed a couple of very important pieces of legislation. The intent of the legislation is to encourage the use of efficient, environmentally friendly energy sources including geothermal. The encouragement (and benefit to home and business owners) comes in the form of substantial tax credits.

The Energy Improvement and Extension Act of 2008 (H.R. 1424) offers a tax credit of 30% to homeowners who install a geothermal (ground source heat pump) system on their property. The property must be residential property within the United States, but does not need to be the primary residence. The 30% tax credit counts toward the heat pump, ground loop, related equipment, and all labor costs including any other plumbing, wiring and/or ducting needed to make the system work. The system must meet or exceed current Energy Star requirements (all our systems are Energy Star), and be placed into service after December 31, 2007. The credit was initially capped at $2,000, but the American Recovery and Reinvestment Act of 2009 eliminated the cap. Now you can install a geothermal system and take full advantage of the 30% tax credit! In 2016, congress let this tax credit lapse while still supporting other renewable energy technologies tax credits, but this inequity was retroactively corrected in January 2018 with geothermal tax credits now extending through 2021! There are slight reductions in the credit in 2020 and 2021, so RIGHT NOW is the best time to install a geothermal sytem.

The US Department of Energy has prepared a page about these tax credits -- click here (note: does not yet include the 2018 extension of federal tax credits through 2021). Please call your tax professional for more details about these significant tax incentives.

Commercial Renewable Tax Credits

Both the federal and state tax credits for commercial renewable energy property are equal to 35% of the cost of renewable energy property constructed, purchased, or leased by a taxpayer. However, the limits per installation are way higher than for residential systems. Please contact us directly if you have a commercial site for geothermal heating and cooling, and we will provide you with a full assessment of the tax issues as well as a complete assessment of the savings possible with geothermal. You can find many of these details at the US Department of Energy's tax incentives site - US Department of Energy DSIRE.

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