The Obama Administration on March 19 issued an Executive Order , “Planning for Federal Sustainability in the Next Decade,” that is meant to cut the Federal Government’s greenhouse gas emissions by 40% over the next decade from 2008 levels. And the White House recognizes that geothermal heat pumps (GHPs) are one technology that can help reach its goals. The order mandates that the federal government increase the share of electricity it consumes from renewable sources to 30%, and that it increase energy efficiency and renewable thermal energy use by federal buildings. The order also seeks a reduction in government motor vehicle fuel and water use. GHPs are specified in the Executive Order.
“We are extremely pleased that the White House cited ‘geothermal heat pumps’ when referring to renewable energy,” said Geothermal Exchange Organization (GEO) President Doug Dougherty. “GHP inclusion is the direct result of two GEO meetings with the White House Council on Environmental Quality, with the most recent also involving the Office of Management & Budget. That meeting late last year was about using GHPs as a carbon offset for proposed new power plant emission rules by the U.S. Environmental Protection Agency. All 50 states should follow the federal example, and recognize GHPs not only for their efficiency, but for the renewable energy they produce from the earth, reducing the thermal loads of buildings.”
Since the federal government is the single largest consumer of energy in the nation, federal emissions reductions and progress across the supply chain will have broad impacts. With a footprint that includes 360,000 buildings, 650,000 fleet vehicles, and $445 billion spent annually on goods and services, the Federal Government’s actions to reduce pollution, support renewable energy, and operate more efficiently can make a significant impact on national emissions. Specifically, the Executive Order directs Federal agencies to:
- Ensure 25% of their total energy (electric and thermal) consumption is from clean energy sources by 2025.
- Reduce energy use in Federal buildings by 2.5% per year between 2015 and 2025.
- Reduce per-mile GHG emissions from Federal fleets by 30% from 2014 levels by 2025, and increase the percentage of zero emission and plug in hybrid vehicles in Federal fleets.
- Reduce water intensity in Federal buildings by 2% per year through 2025.
“The fact that GHPs are officially recognized as a source of clean energy in the President’s Executive Order on Sustainability is a homerun for the GHP industry,” said Dougherty. GHPs are easily applicable to many sections of the Executive Order as an efficiency tool and renewable thermal energy source for saving energy, reducing costs and curbing greenhouse emissions by federal buildings across the nation.” To review the Executive Order, click here.
GEO President Doug Dougherty
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.