Geothermal systems tax credit is back
Federal legislation has been passed to extend the tax credits for residential and commercial installations of geothermal heat pumps.
The reinstated tax credits are retroactive to Jan. 1, 2017, and have been extended to Jan. 1, 2021, for projects commencing by that date.
Any homeowner who bought a geothermal heating and cooling system at any point last year will qualify for the tax credit.Under the measure, the tax credit will remain at 30 percent until 2019, drop to 26 percent in 2020 and 22 percent in 2021, when it expires at the end of that year.
The tax credit had been in place between 2009 and 2016, but a drafting error allowed fuel cell and home geothermal tax credits to expire at the end of 2016. At the time, solar and wind tax credits were extended into 2021. The Geothermal Exchange Organization estimates that geothermal installations in the country fell by 45 to 50 percent in 2017.