Unpacking the Stimulus Package, Vol. 6
The stimulus package expanded consumer tax incentives for homeowners who make energy efficient home improvements and for individuals and businesses that purchase or lease hybrid vehicles. These consumer tax benefits, initially introduced in the Energy Policy Act of 2005 (EPACT), have been extended through 2010. In addition, the total available tax credit has been tripled (from $500 to $1,500), the available tax credit has been increased to 30 percent of the cost of each qualified energy efficiency improvement, and the cap on geothermal heat pumps and solar water heaters has been removed. In addition to federal tax incentives, consumers may also be eligible for state or utility sponsored rebates and state tax incentives. More information can be found at the United States Department of Energy and the Alliance to Save Energy.
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It’s a great time to invest in geothermal heating and cooling technology. The American Recovery and Reinvestment Act of 2009 recently lifted the caps on tax credits to qualified geothermal heat pumps, which was previously set at $2000. Homeowners who install a geothermal ground loop or ground water geothermal heat pump qualify for this one time of up to 30% of the total investment, as long as the pump meets or exceeds EnergyStar requirements and installed after December 31, 2009. Business owners will receive a credit of 10% of the total investment. Units installed in 2008 are subject to a $2,000 cap, but those installed between 2009-2016 have no cap.
This substantial tax credit is just one of the many benefits of using geothermal technology to heat and cool your home. Geothermal systems use 25-50% less electricity than conventional systems. According to the EPA, geothermal pumps reduce energy consumption up to 44% compared to air-source heat pumps, and up to 72% compared to standard air-conditioning. In humid areas, like Florida, geothermal heat pumps improve humidity control by maintaining 50% relative indoor humidity.
But it’s not just the tax credit or energy savings that should peek your interest, geothermal heat pumps are also extremely durable and reliable. The underground piping carries warranties of 25-50 years, and the heat pumps are known to last twenty years of longer.
So, if you’re looking for a reliable system that will also give you tremendous savings on your energy bill over the long-run, a geothermal heat pump may just be what you’re looking for!
I think it is fantastic how the stimulus funds are making a difference. They are being taken advantage of all the time with the installation of geothermal heat pumps to replace high energy heating and cooling systems.