On Feb. 9, 2018, the U.S. geothermal heat pump industry had its federal tax credits restored for both residential and qualifying commercial installations.
The federal tax credits, which correspond to a 30% credit for residential installations and a 10% credit for qualifying commercial installations, were passed as part of the Continuing Resolution Spending Bill that was recently approved by Congress. The reinstated tax credits for the geothermal heat pump industry are retroactive to Jan. 1, 2017, and have been successfully extended to Jan. 1, 2022.
For commercial geothermal heat pump projects, the language of the tax credits has also been adjusted to reflect a favorable change regarding project eligibility. Commercial geothermal heat pump projects are now eligible for the federal tax credit if they are commenced by Jan. 1, 2022. Under previous language, commercial geothermal heat pump projects would have needed to be placed in service by Jan. 1, 2022, in order to qualify for the federal tax credit.
As a proud member of the geothermal heat pump industry, Melink is thrilled to see a renewed commitment from our congressional leaders toward the future of this energy efficient and sustainable technology. With its more efficient operation in both heating and cooling modes, geothermal heat pump technology has incredible potential to reduce both the peak electrical demand and overall utility usage of the built environment here in the U.S.
These federal tax credits will ultimately make geothermal heat pump technology more accessible to the public and will help drive adoption of one of the most energy efficient and sustainable heating and cooling systems available. Furthermore, these tax credits will only stand to improve the financial return of geothermal heat pump systems for Melink’s clients around the country, further enhancing what has already been proven as a sound financial investment.
Here’s to a bright future for geothermal heat pump technology — in 2018 and beyond!