Geothermal heat pumps are widely recognized as the most energy-efficient way to cool and heat homes and buildings. The federal government also realizes this, and is offering a generous geothermal tax credit for homeowners who install a qualifying system before the end of 2016. Their hope is that more people will opt for these energy savings systems by taking advantage of this 30 percent tax credit for qualifying geothermal heat pumps.
In order to qualify, the system must meet the U.S. Department of Energy’s (DOE) standards to be classified as an Energy Star system at the time it’s installed. New and existing homes qualify as long as they’re either a primary or second home. Rentals do not. The credit covers nearly the entire cost of the equipment and its installation, with the exception of the ductwork and an optional emergency heating coil.
This is not a tax deduction, where you subtract the cost of the system from your taxable income. Rather, you can actually deduct the cost of the qualifying system from your federal tax liability, which works out to much more savings than you’d get with a tax deduction. Along with qualifying solar systems, these are currently the only HVAC systems for which you can receive a federal tax credit. However, many states, localities and utilities also offer credits, rebates and other incentives. By offering the geothermal tax credit, the federal government hopes more homeowners will opt for this type of system.
These systems use the stored solar and thermal energy underground to exchange heat summer and winter. They can even use the heat to heat swimming pools and your home’s water. As heat pumps, they move heat energy (not air) back and forth, depending on the season. In the summer, the pump moves heat from your home and “rejects it underground” into a heat sink. The process reverses in the winter, when the geothermal system brings heat from the ground inside where it’s converted into efficient heating for your home.
These systems also provide durability and safety. They underground loop field is usually guaranteed for 50 years, and the indoor heat pump can last 25 years as long as it’s routinely maintained. They use no above-ground yard space and run quietly indoors. Since they use no fuel, there’s no risk of carbon monoxide exposure indoors.
If you’ve been considering a high-efficiency system, contact the pros at Jackson & Sons Heating and Air Conditioning, who can provide more information about the geothermal tax credit. We’ve provided quality HVAC services for eastern North Carolina homeowners since 1974.
Our goal is to help educate our customers in Eastern North Carolina (including Wayne, Johnston, Greene, Lenoir, and Duplin Counties) about energy and home comfort issues (specific to HVAC systems). For more information about geothermal tax credits and other HVAC topics, download our free Home Comfort Resource guide.
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