Wisconsin Geothermal Association

The Energy Improvement and Extension Act of 2008 (H.R. 1424) offers 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 primary residence. Please note that the credit excludes geothermal systems used solely for swimming pools and/or hot tubs. The 30% tax credit counts toward the heat pump,ground loop and related equipment. Labor costs for excavation and installing the loop field, installing the heat pump, and any other plumbing, wiring and/or ducting needed to make the system work are also included. The system must meet or exceed current Energy Star requirements, and be placed into service after December 31, 2007 H.R. 1424 caps the credit at $2,000. The American Recovery and Reinvestment Act of 2009 sweetens the deal for geothermal. Everything basically stays the same, except that the $2000 Cap to the tax credit has been eliminated. 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 31st, 2016.

An extension of the Commercial Building Tax Deduction until 2013 that allows building owners to deduct up to $1.80 per square foot for improvement in overall Performance.

Residential Energy Efficient Property Credit Form 5695.

Energy Star and the U.S. EPA have updated the geothermal specifications for the Energy Star program. The new changes take effect December 1st 2009 with no retroactive installations qualifying under this new program.

• There are now three efficiency tiers to allow manufacturers time to increase equipment efficiencies.
• Tier 1 includes the same efficiencies as the current 2.0 program for water-to-air units, but adds water-to-water units to the program.
• Tier 2 increases the efficiencies for water-to-air units (no change for water-to-water units), and takes effect January 1st, 2011.
• Tier 3 increases efficiencies for water-to-air and water-to-water units, and takes effect January 1st, 2012.
• The desuperheater is no longer a requirement for Energy Star, but must be offered as an option.
• A requirement has been added for AHRI certification or 3rd party verification by an EPA approved agency for manufacturers and the ratings of the heat pumps.
• The cap on capacities has been removed in favor of language that states that units must be single phase voltage.