The Geothermal Federal Tax Credit
Under the Inflation Reduction Act of 2022, homeowners who install a geothermal heat pump that meets ENERGY STAR® requirements qualify for a federal tax credit of 30%.
The credit is good through 2032, gradually reducing until it expires in 2034.
Important details to know about the credit include:
- It covers 30% of the system’s total cost.
- It can be used to offset the alternative minimum tax.
- ENERGY STAR geothermal heat pumps are eligible for tax credits separate from those for other heating improvements like furnaces and boilers.
- You can use it in more than one year.
- It can be combined with solar and wind credits.
Houses, apartments, condos, and mobile homes are all eligible for the federal credit. You can claim the credit on IRS Form 5695 or get more information from your tax accountant.
The Residential Clean Energy Program
Maryland’s Residential Clean Energy Rebate Program is designed to encourage and help state residents invest in renewable energy. It offers rebates for geothermal heating and cooling systems.
To qualify for the $3,000 incentive, the system must include a new geothermal heat pump and a new heat exchanger loop.
Rebate applications are accepted through June 30, 2024, but it’s best to apply as early as possible, as there’s no guarantee the rebate will be available once the program’s budget has been exhausted.
The Maryland Energy Administration (MEA) encourages homeowners to use the fillable PDF application.
- You must submit the application to the MEA within 12 months of installation.
- The heat pump must be installed at your primary residence.
- The property cannot be held in an irrevocable trust.
- The project size must exceed one ton.
Save on Installation With Southern Pride Service
Eco-friendly, quiet, and efficient, geothermal heat pumps can help you reduce your yearly energy costs by up to 50%. Their average life span of 30 years means they often outlast other HVAC equipment, and they typically provide a return on investment within five to 10 years.
Since 1993, family-owned and -operated Southern Pride Service has provided the highest quality residential geothermal heat pump services, including repairs, in and around Charles, Prince George’s, Calvert, and St. Mary’s counties.
Our upfront pricing, fair prices, and 100% satisfaction guarantee make us southern Maryland’s HVAC service provider of choice.
Want to learn more about the federal and Maryland state energy efficiency rebates or about installing a new geothermal heat pump at your southern Maryland home?
Contact Southern Pride at (301) 932-4925 to get started.
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