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Our Ultra-Efficient HVAC System often has double the operating efficiency than typical HVAC equipment, and may qualify for federal tax credit, state and local government incentives, utility power company demand reduction program , and rebates. |
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IN October 3, 2008, The Emergency Economic Stabilization Act of 2008, H. R. 1424, became law. Included were tax credits for alternative energy systems among which are geothermal heat pumps. See ******
Included in the bill establishes a one-time tax credit for 30% of the cost of job, up to $2,000, but now in 2009 the limit was lifted and homeowners can now get the full 30% credit for units that meet the tax credit specification of minimum efficiencies of 14.1 EER/3.3 COP for closed (ground) loop or 16.2 EER/3.6 COP for open (ground water) loop. These eligible geothermal or hybrid geothermal heat pump installations are those “placed in service' between January 1, 2008 and December 31, 2016 and must meet or exceed Energy Star requirements (minimum efficiencies shown above). *******
February 2018 the Geothermal tax credit was passed for geothermal systems placed in service from Jan. 1, 2017 through 2020, the credit is 26%, and then it drops to 22% through 2022, of the cost of the system.
Owners can file for the credit by completing the Renewable Energy Credits subsection on their tax return forms. For taxpayers subject to the Alternative Minimum Tax, the credit can be claimed on their taxes for the following year.
It is recommended to consult with a tax preparer about receiving this credit. No proof of purchase will be required; however in case of an audit, owners are encouraged to keep a detailed invoice of their purchase on file. The contractor who sold and installed the system should list the purchase as a “Geothermal Heat Pump” on the invoice and that it “Exceeds requirements of Energy Star program currently in effect”. The taxpayer must have a copy of the Manufacturer's Certification. This Certification document is not submitted with the taxpayer's return, but must be retained for tax records |
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These recent changes in Federal law contain long-term tax incentives to encourage the use of renewable energy technologies, including geothermal and hybrid geothermal heat pumps, in homes and businesses. |
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Tax Credits |
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Residential & Commercial Tax Credits |
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Residential Geothermal Tax Incentives
2009 to 2016 - 30% of total GHP system cost (EXPIRED)
Jan. 1, 2017 through 2020, the credit is 26%, and then it drops to 22% through 2022, of the cost of the system.
Bonus: Can be combined with solar and wind tax credits |
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Commercial Geothermal Tax Incentives
10% of total GHP system cost Can be combined with solar and wind tax credits |
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Eligibility
Home must be located in the U.S. |
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Eligibility
Building located in U.S. Installed between 10/3/2008 and 12/31/2016 |
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For IRS form 5695 - Residential 2008 |
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Many utilities offer rebates or financial incentive programs aimed at commercial users of peak kW demand. |
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Accelerated Depreciation
5 year MACR depreciation for entire GHP system
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Tax Credits, Incentives, rebates, grants, rules, regulations, and policies for renewable and efficient energy products.
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Consult your local tax professional for advice on taking advantage of the tax credit. |