Spending money to save money and energy might help you qualify for federal tax credits when you file for 2019 in 2020. Geothermal heat pumps will qualify you for a federal tax credit.
The federal Department of Energy (DOE) has an interest in promoting energy savings’ incentives because producing energy makes an impact on public health and the environment.
Geothermal Heat Pump Tax Credit Details
The federal government will give you a 30 percent tax credit for installing a qualifying geothermal heat pump. This is the last year for the 30 percent credit. The credits fall to 26 percent in 2020 and 22 percent in 2021. The federal GHP tax credit for geothermal systems was reinstated in 2018 as a part of the budget negotiations.
According to the U.S. DOE, GHPs are the most energy efficient of all residential HVAC systems. Instead of using nonrenewable fuels for heating, they simply use the renewable energy underground. The heat pump extracts its heat, concentrates it and brings it inside. The reverse happens in the summer. The GHP collects the heat from your home and deposits it into the soil.
To qualify, the GHP must be Energy Star-certified. The tax credits have no limit on how much you can claim for either the cost of the GHP or its installation. You can install the GHP in your current home or a vacation home. Rental properties do not qualify.
Compared to air source heat pumps, GHPs last longer and cut energy use significantly. The underground loop field lasts 50 years and longer while the indoor components can easily reach 25 years with proper maintenance. The loop field circulates the liquid the system uses for collecting and discharging heat. The indoor handler contains an evaporator coil and a fan to distribute the conditioned air.
If you’d like more information about the tax credits for geothermal heat pumps, contact Hartman Brothers Heating & Air. We provide HVAC services for Dayton-area homeowners.