Governor Terry Branstad Signs Iowa Geothermal Incentive Into Law

Iowa Governor Terry Branstad signed SF 2432 into law, providing a state tax credit for residential geothermal heat pump (GHP) installations equal to 20% of the federal residential energy efficient property tax credit. It can be used for tax liability for 10 years or until depleted. Considering the federal GHP tax credit of 30% for residential installations, the Iowa GHP credit is equivalent to 6% of system cost. The law is applicable to any new or refitted construction or installation of a geo-thermal heating or cooling system on or after July 1, 2012, on property classified as residential.

An important part of the bill is a property tax exemption for 10 years on additional appraised cost of real estate by installing geothermal systems. Installing a GHP in an Iowa residence typically increased the dwelling property tax by $300-$350 per year.

According to the Iowa Geothermal Association, it will take some time for new forms to be developed by the Iowa Department of Revenue for filing with the county assessor, and for the Department of Revenue to develop appropriate rules to implement the new law. (Iowa Geothermal Association)