//Residential Geothermal Energy Incentives Cap Lifted

Residential Geothermal Energy Incentives Cap Lifted

The $2,000 cap previously required on the 30-percent federal tax credit available to homeowners who install geothermal heat pumps at their residential property has now been eliminated by the American Recovery and Reinvestment Act of 2009.

Along with utility companies such as Gulf Power’s $400 per ton rebate plus the 30 percent federal tax credit mean that almost 40 percent of the customer’s costs will be covered. In addition, with all these credits, a customer that finances a system in their mortgage may have a positive cash flow their first year. And here’s the best part — customers can cut heating and cooling costs in half.

Geothermal heat pumps — which use the relatively constant temperature of the earth as a source to heat and cool homes — are the most efficient system available for heating and cooling homes, according to the U.S. Department of Energy. Near-constant ground temperatures of 65 to 70 degrees year-round in the Southeast makes geothermal energy an ideal way for Gulf Power’s customers to heat and cool their homes.

Now included as a renewable energy source as with wind and solar, geothermal is getting more of the spotlight as an energy miser and for its benefit to the environment in reducing greenhouse gases. In addition, geothermal systems are recognized for superior comfort and reduced maintenance.

“We know geothermal is a reliable, proven technology — it’s the most efficient system you can buy,” said Sandy Sims, Gulf Power spokeswoman. “But what customers need to know is that geothermal heat pumps also provide superior comfort, along with energy savings.  Geothermal heat pumps use the green energy of the earth so that when it’s 90 degrees outside, the geothermal heat pump system doesn’t have to work as hard as conventional heat pumps or air conditioners.”

A closed-loop system connects an indoor heat pump with plastic piping buried outdoors. The system circulates water through these underground pipes where it is warmed by the earth in the winter and cooled by the earth in the summer. This natural heating and cooling action, in conjunction with heat pump technology, can maintain indoor spaces at a constant, comfortable temperature.

Geothermal installations have increased in recent years, as homeowners and large commercial projects turn to geothermal for payback on their investment, often with a 30 to 50 percent reduction in heating and cooling costs.