Geothermal Wins with New IRA Tax Creditsby HVAC Distributors April 14, 2023
On August 16, 2022, Congress passed legislation for the revised Inflation Reduction Act that included significant increases in tax credits and incentives for the installation of geothermal systems. Tax credit opportunities for residential geothermal systems were increased from 26% to 30%. Opportunities for commercial geothermal systems skyrocketed from 10% to 30% with the potential to receive up to 50% of the project cost in tax credits or rebates.
Geothermal systems have been around for decades and are known for superior efficiency that deliver significantly reduced utility costs that pay for the investment over time as an environmentally clean and renewable technology. The greatest obstacle geothermal has faced for mass adoption is the significantly higher initial cost versus traditional HVAC systems.
The IRA tax credits have leveled the playing field for geothermal by significantly reducing the initial cost to the point where payoff and profitability versus traditional HVAC systems can occur in as little as one to two years with exponential savings thereafter.
The IRA Tax Credit Advantage. Simplified.
The IRA legislative code for geothermal can be difficult to understand and interpret. ClimateMaster’s in-house IRA team have meticulously analyzed and interpreted the geothermal sections of the code and collaborated with national industry and legal experts. The findings have been used to create the Residential and Commercial Tax Guides below, that are organized and written for industry professionals to quickly understand IRA guidelines and serve as a resource.
Download the Residential IRA Tax Guide
Download the Commercial IRA Tax Guide