Geothermal Heat Pump federal tax credits reinstated
Federal tax credits for geothermal heat pumps were recently reinstated by the federal government. Residential consumers are eligible for a 30 percent federal tax credit for installing a geothermal heat pump system in their home. The reinstated tax credits are retroactive to Jan. 1, 2017, meaning that anyone who installed a geothermal system in their home in the past 14 months now qualifies for the tax credit. The tax credits are extended through Jan. 1, 2022, through a phase out plan in which the credit is reduced to 22 percent before ending.
The geothermal tax credit was part of a measure to extend the tax incentives to renewable energy technologies like geothermal heat pumps, combined heat and power systems, microturbines, small wind systems, fuel cells, etc., that were taken out of the legislation passed by Congress two years ago, extending the tax credits for the solar industry.
In addition to the residential tax credits, there is also a 10 percent investment tax credit for commercial geothermal systems that was also extended.
The National Rural Electric Cooperative Association joined with a coalition of many national and state organizations to support reinstatement of the tax credits. The cooperatives are appreciative of the efforts of Rep. John Shimkus and several other Illinois Congressmen who sponsored legislation leading to the tax credit reinstatement.
The tax credit extension was part of the Continuing Resolution action by the Congress in early February to fund the federal government.
“We are appreciative of our leaders’ support for Geothermal Heat Pump technology, and providing parity with the other renewable energy technologies,” said John Freitag, executive director of the Geothermal Alliance of Illinois. “Geothermal heating and cooling is by far the most efficient and effective way known today to heat and cool our homes and businesses. The tax credit extension helps to make installation of a geothermal heat pump the obvious best choice for heating and cooling.”
Thanks to John Freitag, Executive Director of the Geothermal Alliance of Illinois for this article.