Federal Budget and Stimulus Signed into Law – Credits for Geothermal Included
Dec. 28, 2020 – President Trump ended several days of uncertainty last night, signing into law a massive budget, economic stimulus, and Covid-19 relief package. As we mentioned last week, this legislative package includes an extension for commercial and residential geothermal heat pump (GHP) tax credits. See our announcement from last week here.
The new law extends the credits for GHP installations through 2023. Residential credits are 26% through 2022, step down to 22% in 2023, and expire January 1, 2024. Commercial credits remain at 10% through 2023.
Additionally, the law sees the implementation of a long-sought change in the federal definition of renewable energy. That section in federal procurement law was amended to define “energy avoided” by a GHP as “energy produced” for the purposes of meeting clean energy targets in federal buildings. This change will further incentivize federal agencies’ adoption of GHPs and will have a cascade effect in state renewable energy and procurement policies.
The law also makes the Section 179D Energy Efficient Commercial Buildings Deduction permanent and indexed to inflation. Our friends at Energy Tax Savers are the foremost experts on this deduction and if your business is involved in any commercial GHP installations, it is important for you to understand this benefit. Learn more about Energy Tax Savers and the deduction here.
There are dozens of other provisions in the enacted legislation that impact small businesses. The U.S House of Representatives Small Business Committee has released a stimulus fact sheet that can be read here. Additional information can be found here.
GEO is thrilled to end 2020 on a high note and give the GHP industry a longer runway to continue to drive adoption and acceptance of the technology. 2021 will be a big year for our efforts as we strive for commercial parity with solar and further recognition on Capitol Hill and in statehouses around the country.
Please stay tuned to the Geothermal Exchange Organization’s social channels for more updates from Washington:
If you have any questions about the legislation or the tax credits, don’t hesitate to reach out to firstname.lastname@example.org.