Geothermal Tax Credits in the US

Residential Geothermal Tax Incentives

Planning an energy efficiency project with solar, wind, or geothermal? Through 2016 federal energy tax credits for all three are unlimited, with a 30% return on taxes.

Eligibility:

Through December 31, 2016 taxpayers receive an unlimited 30% tax credit on qualifying solar, wind, and geothermal residential energy improvements. The systems must meet or exceed EnergyStar requirements and be located in the US. Qualifying homes include:

Primary residence
Second homes
Existing homes
New construction

Rentals do not qualify for this break. The inclusion of second homes is a departure from previous federal energy tax credits and dramatically expands the potential reach of this program.

Consult your local tax professional for advice on taking advantage of the tax credit, as this announcement is not intended as a recommendation or endorsement of any financial strategy.

Commercial Geothermal Tax Incentives

10% of total GHP system cost
No limit to total credit amount
Can be used to offset AMT tax
Can be combined with solar and wind tax credits
Can be used in more than one year
10% grant available in lieu of tax credit

Accelerated Depreciation:

5 year MACR depreciation for entire GHP system
Eligible for 50% first-year bonus depreciation for 2008 - 2009

Eligibility:

Building located in U.S.
Original use begins with taxpayer

Installed between 10/3/2008 and 12/31/2016

Download the brochure: Residential Federal Tax Incentives for Geothermal

Download the brochure: Commercial Federal Tax Incentives for Geothermal

Helpful Resources

Excerpt from the Energy Improvement and Extension Act pertaining to geothermal.
IRS Form 5695*: Residential Energy Efficient Property Credit
- More Information about the "Residential Renewable Energy Tax Credit"
- Find additional tax incentives that may be available in your state - www.dsireusa.org