30% Federal Tax Credit For Geothermal
In addition to the great savings possible with Geothermal heating and cooling, there is now a 30% federal tax credit available. Beginning in late 2008, the federal government passed a couple of very important pieces of legislation. The intent of the legislation is to encourage the use of efficient, environmentally friendly energy sources — including geothermal. The encouragement (and benefit to home and business owners) comes in the form of substantial tax credits.
The Energy Improvement and Extension Act of 2008 (H.R. 1424) offers a tax credit of 30% to homeowners who install a geothermal (ground source heat pump) system on their property. The property must be residential property within the United States, but does not need to be the primary residence. The 30% tax credit counts toward the heat pump, ground loop, related equipment, and all labor costs including any other plumbing, wiring and/or ducting needed to make the system work. The system must meet or exceed current Energy Star requirements (all our systems are Energy Star), and be placed into service after December 31, 2007. The credit was initially capped at $2,000, but the American Recovery and Reinvestment Act of 2009 eliminated the cap. Now you can install a geothermal system and take full advantage of the 30% tax credit! This legislation is good for installations placed into service from January 1, 2009 through December 31, 2016.
The NC Solar Center has prepared a page about these tax credits -- click here. Please call your tax professional for more details about these significant tax incentives.
North Carolina State Tax Credits
North Carolina Renewable Energy Tax Credits Tax credit equal to 35% of the cost of renewable energy property constructed, purchased, or leased by a taxpayer. Eligible costs include: Equipment and associated design Construction costs Installation costs less any discounts, rebates, etc. The NC Solar Center has prepared a page about these tax credits -- click here.
Active Space Heating Credit limit of $3,500 per dwelling unit applies to geothermal combined with solar. The state legislature is working on this tax credit right now, and the requirement for a solar panel may go away. In any case, it is a significant tax credit, and there is a positive reason to combine solar with geothermal in many locations -- call us for an explanation.
The needed forms and instructions are available from the North Carolina Solar Center Website at the above link.
Commercial Renewable Tax Credits
Both the federal and state tax credits for commercial renewable energy property are equal to 35% of the cost of renewable energy property constructed, purchased, or leased by a taxpayer. However, the limits per installation are way higher than for resicential systems. Please contact us directly if you have a commercial site for geothermal heating and cooling, and we will provide you with a full assessment of the tax issues as well as a complete assessment of the savings possible with geothermal. You can find many of these details at the NC Solar Center's tax incentives site - NC Solar DSIRE.
