The global community is working together to reduce greenhouse gas emissions by researching and developing alternative energy sources that are renewable, sustainable, and less harmful to the environment. Geothermal energy is at the forefront of renewable energy sources, alongside solar, wind, biomass, hydro, photovoltaic, and fuel cell energy technology. Geothermal heat pumps simply tap into the relatively stable warm temperature of underground or ground water that is then brought into a home where only a minimal amount of electricity is needed to make the small leap to a warmer temperature in winter. In summer, the process is reversed, and warm air is drawn out of the home and cooler air is brought in. It is a highly efficient, clean, risk-free, low-maintenance, renewable energy source system that can provide substantial fuel savings to homeowners while reducing foreign fuel dependency and carbon emissions. Geothermal heat pumps can be used in almost any location in the US where ground and local development conditions are suitable.
The United Nations Intergovernmental Panel on Climate Change (IPCC) recently released a report in May 2010, and it has greatly encouraged leaders of the renewable energy industry. The 1,000-page report contains input from 120 energy experts who have concluded that renewable power sources could conceivably provide nearly 80 percent of the world’s power by 2050, with the right policy support systems in place. To encourage implementation and use of renewable energy systems, most governments are offering generous economic incentive support in the form of tax credits, loan guarantees, and corporate subsidy, including geothermal energy projects large and small.
In response to the United Nations IPCC report, Geothermal Energy Association’s Executive Director Karl Gawell said, “Now, we need to see national energy plans and policies like strong national renewal energy standard and long-term incentives to accelerate this transition to a new, clean energy future.” Geothermal energy and other renewable sources are strongly supported by the United States government at the federal level by way of tax credits, and many states are offering tax incentives as well. US President Barack Obama has proposed a Clean Energy Standard policy that could result in 80 percent of US energy coming from renewable sources by 2035, and he is seeking to divert $4 billion in oil company tax subsidies and put it toward renewable energy research, development, and support.
Geothermal tax credits were originally introduced in the Energy Policy Act of 2005, amended in the Emergency Economic Stabilization Act of 2008, and further extended by The American Recovery and Reinvestment Act of 2009. A tax credit is more valuable than a deduction because consumers can itemize the purchases they make on their federal income tax return and reduce the amount of any tax owed to the government. Some consumers may also be eligible for state or utility rebates or other state or local tax credits. A valuable database directory of existing geothermal tax credits available can be found at DSIRE, the Database of State Incentives for Renewables and Efficiency, which is put together by North Carolina State University in conjunction with the US Department of Energy (DOE), the Interstate Renewable Energy Council (IREC), and the North Carolina Solar Center. The DSIRE website address is http://www.dsireusa.org. The DSIRE website also provides an impressive links list of international, national, and state renewable energy organizations, in addition to federal resources and agencies. More tax credit information can be found at the ENERGY STAR website at http://www.energystar.gov/taxcredits.
Current federal geothermal tax credits for the purchase of geothermal ground source heat pumps are 30 percent of the cost, including installation and labor, with no cap, of systems that are placed in service before December 31, 2016. Called the Residential Renewable Energy Tax Credit, this credit applies to taxpayers’ primary residences as well as second homes located within the US, and to new construction as well as existing homes, but not to rental properties. Geothermal heat pumps placed in service in 2008 are eligible for a maximum credit of $2,000, but those placed in service after January 1, 2009, and until December 31, 2016, can receive the 30-percent geothermal tax credits with no maximum imposed. If the installation is made in a newly constructed home, the actual date of occupancy by the residents is considered to be the “placed in service” date for tax credit purposes.
To be eligible for the geothermal tax credits, homeowners must purchase geothermal heat pumps that meet federal Energy Star criteria. Labor and installation expenditures that are covered in the 30-percent geothermal tax credits include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to connect a system to the dwelling. More general information about geothermal energy and the system equipment used can be found at:
http://energy.usgs.gov/other/geothermal/geothermal_learn.html and the Geothermal
http://www.geo-energy.org
http://www.nrel.gov/learning/re_geo_heat_pumps.html.