As part of Inflation Reduction Act, section 25D of the Internal Revenue Code, projects utilizing ENERGY STAR qualified geothermal heat pumps receive a 30% U.S. tax credit for eligible system costs, including the heat pump, ground loop field, etc. Check with your local installer and tax professional for more details.
For new construction or existing homes owned by the taxpayer, there's a U.S. federal tax credit available based on eligible system costs, which includes installation costs.
Is there any geothermal equipment not covered by the tax credit? Portions like ductwork are not included. Find out more details to this question and more below by downloading our Guide to U.S. Residential Geothermal Tax Incentives.
To claim the U.S. Federal Tax Credit, download IRS Form 5695. We recommend talking with a tax professional as you navigate this credit.
States, local municipalities, and utilities offer rebates in addition to federal incentives, low interest loans, or other incentives to support your choice in geothermal heating and cooling.
For more information about what’s available in your area, contact us or visit DSIRE USA for a full list of state and local geothermal heat pump incentives.
Canadian provinces and territories also recognize the benefits of geothermal. The Natural Resources Canada website offers a full list of energy-efficient incentives for major utilities and Canadian municipalities to help maximize your savings.
If you took advantage of the U.S. federal residential geothermal tax credit by purchasing an ENERGY STAR qualified geothermal system, you can download the applicable year’s certificate for your records. We suggest talking with a tax professional when claiming your tax credit and not relying entirely on the certificates below.