Considering a Geothermal Heat Pump? There's a Tax Credit Available!
January 21, 2016
One of the best ways to save on heating and cooling is by using a geothermal heat pump. By making use of the natural heat energy below the ground, it can reduce your energy bills significantly and save you money. The only drawback is installation, which can cost a significant amount.
You'll certainly receive return on your investment in energy savings over time, but even so, those installation costs can make geothermal energy a daunting prospect. However, there's good news: You can get back some of those installation costs even sooner, in the form of a geothermal tax credit.
Residential Renewable Tax Credit
If you have a geothermal heat pump in your home, the Residential Renewable Tax Credit allows you a 30 percent tax credit on all costs, including materials, installation, and labor. The pump must be installed in a residence that you own (no rentals) before December 31, 2016.
And remember, this is a tax credit, not just a deduction. A deduction is applied to your taxable income, and so is limited by how much you make. A credit is just money back, regardless of how much you made or didn't make.
The Residential Renewable Tax Credit can also be applied to a number of other forms of renewable energy installed in your home before the end of next year, including solar and wind power. In addition, there's also an Iowa State tax credit for geothermal heat pumps, which provides a rebate of 20 percent of the federal deduction amount (or 6 percent of the total cost), for geothermal systems.
Both tax credits are valid through the end of the year, so if you've ever considered installing a geothermal heat pump to reduce your energy bills, now is the time to do it.
To learn more about how a geothermal heat pump can benefit you, contact us at Lozier Heating & Cooling. We proudly serve the Des Moines area's HVAC needs.
Our goal is to help educate our customers in the greater Des Moines, Iowa area about energy and home comfort issues (specific to HVAC systems).
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