Another Chance to Extend Geothermal Tax Credits
GEO Applauds Bipartisan Proposal that Benefits Geothermal Heat Pumps
The geothermal heat pump (GHP) industry and several other clean energy technology industries are a step closer to saving thousands of jobs with the reintroduction of tax credit legislation by Reps. Tom Reed (R-NY), Mike Thompson (D-CA) and 18 additional cosponsors (12 Republicans and 6 Democrats).
HR 1090 will reinstitute and extend commercial and residential installation tax credits for GHPs, fuel cells, microturbines, small wind and combined heat and power through 2021. Included are a 10 percent commercial investment tax credit under Sec. 48 of the tax code, and a 30 percent residential income tax credit under Sec. 25D.
The legislation is meant to remedy the inequity created in December 2015 when Congress extended similar tax credits for commercial solar energy and residential solar energy installations, but neglected to include GHPs and other qualifying clean energy technologies. Tax credits for the “orphaned” clean energy technologies ended at midnight on Dec. 31, 2016.
"We care about ensuring that we can produce reliable, clean and affordable energy that our nation needs right here at home. By implementing common-sense policies like this one, we can ensure that this can be accomplished," Reed says. "As we move forward with tax reform, having a structure that encourages this kind of development creates the quality, family-sustaining jobs that people throughout our country deserve, all while helping meet the energy demands of today and tomorrow. It's a win-win."
The Reed bill provides for the same tax benefits enjoyed by solar. For residential applications that includes a retroactive tax credit of 30 percent that phases out in steps before ending on Dec. 31, 2021. The commercial tax credit would remain at 10 percent through 2021. The bill also changes “placed in service” language in the tax code to "construction of which begins before Jan. 1, 2022” for commercial projects, ensuring consumers can enjoy the tax credit benefits right up to their new expiration date.
“Geothermal heat pumps are 100 percent made in the USA, with American-made components manufactured and installed by American workers,” says Geothermal Exchange Organization (GEO) President Doug Dougherty. “Without reinstatement and extension of federal tax credits, the entire geothermal supply chain, including manufacturers, distributors, dealers, contractors, installers, drillers — plus all the families and small businesses that they support — will all see loss of investment and jobs. … The geothermal heat pump industry applauds Reps. Reed, Thompson and their colleagues for introducing this bipartisan proposal, which is a necessary first step in leveling the playing field and saving thousands of jobs in clean energy markets.”
GEO is a non-profit trade association representing the interests of the geothermal/ground-source heat pump industry across the U.S. GEO advocates the technology to government, industry and the public, educating leaders about the economic, national security and environmental benefits of geothermal heat pumps for residential, institutional and commercial applications. To learn more, go to www.geoexchange.org.