End-of-Year Budget and Covid Relief Package Includes Tax Benefits for Geothermal Heat Pumps
Dec. 22, 2020 – After eight months of start-and-stop negotiations, Congress has successfully brokered a massive end-of-year budget and pandemic relief deal which includes major economic stimulus components including an extension of federal tax credits for geothermal heat pump (GHP) installations. The legislation moves on to the White House for President Trump’s signature.
As part of the deal, the Energy Efficiency Property Tax Credit (residential credit) for GHPs is extended for two years at its current level of 26% of total installation cost. In 2023, the credit steps down to 22% and then expires in 2024. The Investment Tax Credit (commercial credit) maintains its current level of 10% through 2023.
Ryan Dougherty, Chief Operating Officer of the Geothermal Exchange Organization said, “We are pleased that Congress was able to pull together and provide relief for struggling businesses and families in this extraordinary year. And we are grateful for the continued support for the geothermal heat pump industry. After the loss of the credits in 2017, it has been a long climb back and the pandemic had major disruptions and impacts for geothermal professionals across the country. This extension provides the certainty we need to continue our efforts to promote geothermal heat pumps and advance the market.”
The legislation also makes permanent the Section 179D Energy Efficient Commercial Buildings Deduction. This tax provision is a significant benefit to any commercial building owner that installs geothermal. Energy Tax Savers has more information on this important provision here.
Dougherty added, “Geothermal professionals aren’t the only winners in this deal. Home and business owners who want the cleanest, most efficient heating and cooling technology available will reap the benefits when they choose geothermal. Federal support sends a strong signal to consumers that this is a preferred system.”
Please stay tuned to the Geothermal Exchange Organization’s social channels for more updates from Washington:
https://twitter.com/GEO_Exchange
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https://www.linkedin.com/in/geo-exchange
If you have any questions about the legislation or the tax credits, don’t hesitate to reach out to info@geoexchange.org.