What is geothermal?
One of the ways we are leaning into environmental responsibility is by using geothermal energy. We root down into the earth to heat and cool the homes we are building.
What is Geothermal?
Geothermal energy is the process of harnessing the natural temperature of the earth’s crust to regulate the temperature of homes or water. Through the use of liquid cooling pipes that store the natural temperature of the earth’s crust, which is between 55-65 degrees, geothermal units are able to heat and cool homes more efficiently. Our geothermal systems dig down two hundred feet per metric ton, and cycle cooled air above and push hot air below in order to create a more climate-controlled home. In the winter this system works in reverse by pulling the warmer ground temperatures up and pushing the cooler air temperature below. The pipes take up minimal space underground and can last for generations.
What does Geothermal mean for me?
- A more efficient heating and cooling process for your home.
- No carbon emissions or fossil fuels are used.
- A quiet system that doesn’t have the loud hum or eyesore of the conventional HVAC compressor units outside most homes today.
- Exceptional filtration keeps pollen, pollutants, and humidity (which can lead to mold) out of your home.
- Money saved over time. Numbers from the US Environmental Protection Agency (EPA) show that homeowners save 30-70% on heating and 20-50% on cooling costs by choosing geothermal heat pumps over conventional systems.
- Tax incentives to purchase of your geothermal unit, which can create long term savings.
What is the federal tax credit?
The Bipartisan Budget Act of 2018, signed in February 2018, reinstated the tax credit for fuel cells, small wind, and geothermal heat pumps. The tax credit for all technologies now features a gradual step down in the credit value. A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.
Geothermal heat pumps tax incentive:
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
- There is no maximum credit for systems placed in service after 2008.
- Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2021.
- The geothermal heat pump must meet federal Energy Star criteria.
- The home served by the system does not have to be the taxpayer’s principal residence.