GET A TAX BREAK
In February, federal tax credits were reinstated for residential and commercial geothermal installations in the U.S. The tax credits cover any geothermal projects begun since January 2017 and will cover new ones that get underway by January 2022. To meet the requirements, the system must use the ground or ground water as a thermal energy source to heat the dwelling. The system must also meet Energy Star standards in effect at the time of installation.
The credits provide a tax break of between 22 and 30 percent of the total cost of the system, including installation costs. For a $30,000 system installed during the window of maximum credits, that’s a potential cost savings of $9,000. State credits, where available, can bump up the after-tax cash savings significantly. In New York State, for example, a 4-ton system is eligible for a $6,000 rebate. That’s a lot of dough.