Geothermal Heat Pump Technology is Poised to Support Economic Recovery and Long Term Energy Goals

The Stimulus Bill signed into law by the President on February 17th has many provisions that recognize the important contribution that the geothermal heat pump industry can make to the nation's economic recovery. Here is a partial list of the bill’s key elements:

• Geothermal heat pump systems for residential applications (new, retrofit, primary, and non-primary residences) receive a 30% tax credit with no cap starting January 1, 2009 through December 31, 2016. (The $2,000 limit for the 2008 tax credit has been removed for 2009 and later years.)
• All commercial and private buildings are eligible for a 10% grant in lieu of tax credit for the total cost of installing geothermal systems with no cap, the check to be written from the government to the building owner within 60 days of completion.
• Federal facilities and military installations will receive billions for energy upgrades, and geothermal heat pumps will be an important component of those upgrades.
• Each state will receive an average of $100 million to upgrade energy efficiency in the state, the uses for that money to be determined by each state, and geothermal rebates and loans are a good use of those funds.
• Schools will receive billions for modernizing and improving energy efficiency, another very good fit for geothermal.

Results of Stimulus Provisions

The 30% residential tax credit has the effect of making geothermal systems cash flow positive at today’s energy prices in virtually every market.

The commercial grants in lieu of 10% credits make geothermal heat pumps very attractive to new and existing commercial enterprises in every market.

For more information and to confirm your eligibility for the credit, please download the pdf of the American Recovery and Reinvestment Act of 2009 and contact your local tax professional. Liberty Heat & Energy, LLC is not able to provide tax advice or tax consultation.