Geothermal Federal Tax Credit Update

Geothermal Federal Tax Credit Update

January 3, 2017. Happy New Year from Precision Comfort Systems! This is just a quick update to this webpage to confirm that the federal tax credit for geothermal systems has ended. We had a tremendous 2016 installing new geothermal systems and we anticipate another strong year as fuel prices in general continue to rise. Keep in touch with our website to learn about any new geothermal incentives coming. Below is my original post from May, 2016 regarding the federal tax credit.

It has been great while it lasted. Imagine purchasing the most comfortable and efficient means of heating and cooling your home and having the government pay for 30% of the cost! That’s what we’ve been enjoying since 2009 with the geothermal federal tax credit. And it’s a true credit, not just a deduction. A tax credit is the last thing you do to your federal tax bill. When the form says you owe $5000 in taxes for 2016 and you apply a $3000 geothermal tax credit, you only owe $2000.

But as we’ve known for several years the credit is due to expire at the end of 2016. Of course our geothermal trade ally groups have been working hard to have the credit extended, but so far nothing has stuck. In December of 2015, when the Omnibus bill was passed some energy efficiency items were included but even though the solar industry got a tax credit extension, the residential geothermal efforts were not included. At first they claimed it was a simple drafting error and that it would be remedied in the near future. But nothing has happened yet.

A recent attempt failed when the Federal Aviation Administration (FAA) reauthorization bill had numerous provisions added, including geothermal, but in the end, it became so bogged down with extras, it was finally cleaned up and eventually passed with no amendments.

So here it is, May and you have an old geothermal heat pump that you have been considering upgrading. An upgrade now is a good idea considering some of the new features on the new Water Furnace systems. Did you know you can now monitor your heating and air conditioning energy usage? What a great way to calculate your energy savings. And don’t forget how commonplace it is to upgrade to a two speed system. Instead of buying a single speed 4 ton unit, you can buy a 3 ton/4 ton system that runs at the smaller, more efficient 3 ton size for most of the summer and then in the winter it starts out as a 3 ton heating device, bumps up to a 4 ton capacity as it gets colder and then finally utilizes the auxiliary heat only when needed in the cold weather.

But back to the topic of the tax credit; if you want to take advantage of the current program, you must purchase and install a new qualifying system before January 1, 2017. Thinking about waiting a few months to see if the tax credit gets renewed? This could be a bad decision. As I mentioned in a letter to some of our customers with older geothermal systems, our last few months of 2016 will be swamped. Precision Comfort Systems has thousands of geothermal customers and many with older systems will be waiting, trying to squeeze out a few extra weeks from their old units. Plus, we install hundreds of geothermal systems in new homes each year and our builders will be pushing us trying to beat the oncoming winter conditions. Please believe me, September through December could be too late to get on the schedule and even if you do sneak in, you are likely to find higher prices by all contractors at this time.

Please do not wait. Call or email us for an estimate on your new Water Furnace system, especially if you were one of our lucky customers who received our special offer letter for $500 off a new 5 Series Water Furnace. But remember, this special is over, June 19! Don’t delay.

 

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