Tax credit for geo thermal now 30% !!!

15 years ago

The new stimulus plan has just increased the tax credit for geothermal systems to 30%. This means 30% off the unit itself, plus the electric installation costs and the well system. This makes the credit a substantial help to those of us thinking seriously about putting such a system in.

In my case, I am looking at a Weatherfurnace Envision system for about $20,000 with electric hook up costs of $1,500, and a pair of wells for $7,700, so near $30,000. A tax credit of approximately $9,000 would help ease the pain. Not having to pay any more oil bills, priceless!

Our oil bill ran $5,700 this past year and $4,499 the year before. New oil heat and a/c systems estimates for our house are running between $15,000 and $ 20,000, so paying the extra money out to save in the long run seems to make sense. It looks like I would save the difference between an oil system and a geothermal one in two years, then actually pay ourselves back for the remaining cost of the geo system in the next five to seven years. Amazing.

Plus, every well company I have talked to around here (coastal NY) has told me they are putting in literally hundreds of wells for these systems. I had had no idea as all the local heat contractors I have spoken with have tried to discourage me from going in that direction. I believe it is because an engineer is needed to design a geo system or it will not work efficiently, and they are simply traditional heating installation guys. Throw in a unit, connect it to a fossil fuel source and turn it on.

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Comments (6)

countryboymo
15 years ago
I think that is a tax credit on your taxable income in which you would not have to pay income taxes on that portion of your pay for the year. I don't think its the same as the 30% off sale at Sears. If it is I am going to have to seriously consider going that route. It is one of them 'too good to be true' things.
duluthjeff
15 years ago
The stimulus bill has eliminated the $2000 limit on federal tax credits for installing a new geothermal residential systems after January 1 2009. Systems installed in 2008 are subject to a $2000 limit. This is a tax credit (not a deduction)so it amounts to a refund of that same amount from your taxes. See link below.

Jeff

Here is a link that might be useful: geothermal tax credit link
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sunnyflies
Original Author
15 years ago
It definitely is a tax credit that reduces your tax bill directly. I looked into it. I believe it will stimulate people to go ahead and put in these systems, which in turn will put money into the economy. Win, win situation!
countryboymo
15 years ago
If that is the case Sunny I could have a geothermal pit DX system for $7,800.00 and not turn a tap between my utilities rebates and the 30% govt. Original quote was $14,500.00 to do a manual J and fix any other existing duct issues along with insulate my ductwork.

I didn't get a quote for air to air but at this rate I am not sure if I should even bother. I am thinking about a refi and was considering upgrading the system with air to air cause the 14k for GT seemed out of reach.

What would you do?
livingthedream
15 years ago
Is there no limit on geothermal, or is it part of the 30%-of-the-first-$5000 limit on other energy-saving home improvements?
countryboymo
15 years ago
I don't think there is a limit as long as it is residential from what I am hearing and reading. I am more shocked that it appears to be more of a tax rebate than a credit. You just don't get the money until after your taxes are filed and processed.