The Geothermal Exchange Organization (GEO) is backing efforts in a number of states to change public policies that currently fail to recognize geothermal heat pumps (GHPs) as a renewable source of energy and an efficient way to satisfy the thermal loads of buildings.
“I wish we could have a cookie-cutter approach for each state and every statute, but all are unique so we have to tailor our approach accordingly,” says GEO President and CEO Doug Dougherty. “In some states our focus is on their Renewable Energy Standards (MA, NH, MD, NM). In others, we are concerned with Energy Efficiency Standards (IL, MI, NY), and in one state both (VT). The goal, however, is the same for all: utility support for GHPs.”
Illinois After two years of legislative and regulatory work by GEO on getting GHPs into the Illinois electric utility Energy Efficiency Program (EEP), Illinois electric utilities can now promote GHPs. GEO expects EEP inclusion of GHPs to start this summer.
Geothermal Exchange Organization (GEO) President and CEO Doug Dougherty joined a “roster of experts” for an article, “Geothermal Loops Back Around,” about the geothermal heat pump (GHP) business in a recent issue of Contracting Business. Their verdict: 2014 was a very good year for growth, despite a significant but temporary decline caused by the extreme cold weather early last year. And they say we can expect the same strong performance during 2015.
“Once the weather broke, we had a resurgence of adoption of the technology in homes and we made up, and then some, all of what we lost in the first quarter,” Dougherty said. “We anticipate a very good 2015 in terms of residential shipments.” Dougherty says the number of commercial installations is also increasing.
“We’ve seen an uptick in architects and mechanical engineers understanding the economic benefits of putting in a geothermal heat pump in a commercial building,” he said. “We have real, quantitative data that shows commercial buildings that put in geothermal heat pumps have a payback of less than two years versus a conventional HVAC system.”
On Dec. 27, Michigan Gov. Rick Snyder (R) signed HB 5397 into law, providing new financial tools for municipal electric utilities operating in the state to help their customers install distributed generation, electric vehicle charging stations, and energy efficiency technologies—including geothermal heat pump heating and cooling systems.
The New York Geothermal Energy Organization (NY-GEO) has successfully worked with State Assemblymember Sean Ryan (D – District 149) to introduce Assembly Bill 2177-A, “An act to amend state tax law, establishing a credit for geothermal energy systems.” Sen. Robert Ortt (R-62nd Senate District) introduced identical companion legislation, Senate Bill 2905, on Jan. 30.
Starting Jan. 1, 2015, the legislation would allow a credit to individual taxpayers equal to 25% of “qualified geothermal energy system expenditures.” The tax credit would not only apply to the purchase of ground-source heat pump equipment, but equipment that is leased for a period of at least 10 years from a person other than the taxpayer.
Vermont legislators will consider a measure to stop utilities from getting credit both for developing solar or wind projects and also for the renewable credits received from out-of-state sales. The bill, H.40, has begun its journey through the legislative process in the Vermont House of Representatives’ Natural Resources and Energy Committee.
Iowa Rep. Dawn Pettengill (R) introduced a bill (HF226) in the Iowa House of Representatives to increase an existing state tax incentive for geothermal heat pump (GHP) installations. Current law allows an individual income tax credit for a GHP system equal to 20% of the federal residential energy efficient property tax credit for GHPs. HF226 raises the Iowa credit to 60% of the federal credit.
The Iowa bill also provides an individual and corporate income tax credit in an amount equal to 60% of the federal energy credit provided by Section 48 of the Internal Revenue Code for a commercial GHP system, if the property is located in Iowa. Any credit in excess of the tax liability is nonrefundable, but may be carried forward for up to 10 years. The Geothermal Exchange Organization (GEO) has conferred with the Iowa Geothermal Association (IGA) about the legislation since its inception.
The U.S. Department of Agriculture (USDA) has announced that rural agricultural producers and small business owners can apply for financial resources to purchase and install renewable energy systems or make energy efficiency improvements. USDA is making more than $280 million available to eligible applicants through the Rural Energy for America Program (REAP). The agency is offering grants for up to 25% of total project costs and loan guarantees for up to 75% of total project costs. Technologies include geothermal heat pumps.
Congress reauthorized the REAP program last year, guaranteeing funding of no less than $50 million in annual funding for the duration of the five-year Farm Bill. Since 2009, USDA has awarded $545 million for more than 8,800 REAP projects nationwide. This includes $361 million in REAP grants and loans for more than 2,900 renewable energy systems.
