Yes, a geothermal system can outperform your conventional HVAC system threefold or fourfold. Yes, it can help you decrease your energy consumption by 25-50%, and yes, it can reduce your monthly utility bills by up to 65%. But, you may wonder, can I afford the initial cost of installation?
These four resources can help you reduce that cost and set you on the path to long-term money- and energy-saving comfort.
1. Federal Tax Credit
As part of the Inflation Reduction Act, the U.S. government offers a 30% tax credit for qualified energy-efficient improvements on your home. Many geothermal systems qualify. You can claim the credit for improvements you make through 2032.
Good to know: A tax deduction is different from a tax credit. A tax deduction lowers the amount of your income before you calculate taxes; it varies depending on your tax bracket. In contrast, a tax credit (the "break" for which geothermal qualifies) reduces the taxes you owe dollar-for-dollar regardless of tax bracket. A credit valued at $3,000 lowers your tax bill by $3,000. Visit irs.gov to learn about the current 30% energy tax credit that can significantly reduce the cost of your geothermal system.
2. State and Local Incentives
U.S. state and local governments offer additional incentives that may apply to your geothermal project. These include grants, rebates, and low-interest loans. The availability and terms of incentives vary by location.
- To learn about energy incentives in your state, visit dsireusa.org, a comprehensive database maintained by North Carolina State University.
- Your state’s energy office can tell you more about incentives and offers that can help you. Go here to find contact information for the office in your state.
- Browse energy.gov for state incentives regarding geothermal systems.
- Click here to learn more about financing options.
Good to know: Grants do not have to be paid back; loans do. Energy incentives and tax credits change over time. Check the website and newsletters of your state’s energy office for current offers. To claim incentives, expect to complete paperwork like tax forms and rebate applications. Keep all relevant documentation, such as receipts, invoices, and product certifications.
3. Utility Company Rebates
Visit your utility company’s website or contact customer service for information about rebates and incentives that may apply to your geothermal installation.
Good to know: When you call, ask about low-interest loans, discounted or free energy audits, net-metering programs, performance-based incentives, and environmental incentives.
4. Energy-Efficient Financing Programs
Federal, state, and local financing programs may help you cover the cost of HVAC upgrades to geothermal heating and cooling. Check out these:
“Green” Financial Institutions– The Clean Energy Credit Union, for example, has financed over 10,000 clean energy loans and helped offset nearly 700,000 tons of carbon dioxide equivalent. They finance geothermal, solar, and more projects. Contact us to learn about the financial institution options available to you.
Industry Folks in The Know
Contact Enertech today with questions about your planned geothermal installation and affordability. We can put you in contact with a knowledgeable installer and provide you with financing options.