Tuesday, February 17, 2009

The 30% Solution

The Stimulus Bill to be signed by President Obama today eliminates the $2,000 limit on the 30% tax credit for homeowners who install geothermal heat pump systems in 2009 and later years.

The Stimulus Bill also establishes grants in lieu of tax credits for geothermal heat pumps installed in commercial buildings. H.R. 1424 previously established the new 10% investment tax credit for geothermal systems, extended these credits through 2016 and allowed them to be used to offset the alternative minimum tax (AMT). By including geothermal heat pumps within the definition of “energy property” in the Energy Credit language, geothermal heat pump systems placed in service after October 3, 2008 will now also be subject to a 5-year depreciation period.

The legislation also dramatically expands support for the Department of Energy’s geothermal research, development, demonstration and deployment efforts. The Bush Administration had sought to close down these efforts, but Congress authorized a broad, new advanced geothermal research program in 2007 as part of the energy bill and has now provided the funds to carry it out. The stimulus bill sets aside $400 million for geothermal technology research, development and deployment efforts at DOE.

“The DOE geothermal research program has been starved for years,” commented Karl Galwell of the Geothermal Energy Association. “The 2007 Advanced Geothermal Research and Development Act provides a framework for an exciting new DOE program, and the stimulus bill gives them resources needed to implement this initiative,” Gawell added.

While most of the research funds will be targeted towards "Big G" Geothermal R&D, there will be money for GSHP as well.

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