What do you know about geothermal heat pumps? If you’ve done your research, you know that geothermal energy provides tremendously efficient heating and cooling by using the earth’s naturally cooler summer temperatures and warmer winter temperatures. Once installed, a geothermal heat pump can last 20 years or more, and the underground loops can easily last 50 years. Such durability is made possible because the system uses very few moving parts, which typically require maintenance, so your need for repairs will decrease significantly.
You may be interested in a geothermal heat pump installation, but you hesitate because of the required initial investment, which can be substantial. However, did you know that the U.S. Internal Revenue Service is offering a geothermal tax credit?
Qualifying for the geothermal tax credit
By installing a qualified geothermal heat pump in a new or existing property used as a primary or secondary residence, you could be eligible for a tax credit totaling 30 percent of the entire system, including installation costs, with no cap. This tax credit was enacted in 2009 and remains available until the end of 2016.
For geothermal systems installed in 2008, there also is a tax credit that applies, but it has a cap of $2,000.
A qualified geothermal heat pump means that the equipment must use the soil or ground water as a thermal energy source for heating or cooling a home. The heat pump must also meet Energy Star program requirements, meaning it must be among the most efficient systems available to qualify for the tax credit.
How to claim the geothermal tax credit
Form 5695 is used to claim residential energy credits for geothermal systems installed after Jan. 2009. Plan to use the tax credit to offset your regular income taxes or alternative minimum taxes (AMT). If your total federal tax credit ends up exceeding your tax liability, any excess amount is rolled over into the next year.
Since the tax credit for geothermal heat pumps is available until 2016, there’s no rush to have one installed. However, the quicker that you make the investment, the sooner you can enjoy the benefits of such an efficient heating and cooling system. To learn more, please contact Rinaldi’s Energy Solutions in Orlando today.
Our goal is to help educate our customers in Orlando, Florida and surrounding areas about energy and home comfort issues (specific to HVAC systems)Geothermal Heat Pump. For more information about geothermal heat pumps and other HVAC topics, download our free Home Comfort Resource guide.
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