Geothermal Tax Credits for Alaska Residents

Looking to save lots of dough on the installation of that geothermal heating and cooling system you’ve always longed for? Well, this could be your opportunity!

The Bipartisan Budget Act of 2018, ratified in February 2018, reinstates the Residential Energy Efficient Property Credit for fuel cells, small wind systems … and geothermal heat pumps. As far as the latter are concerned:

  • This credit remains in effect from now through December 31, 2021.
  • It pays back 30% of approved expenditures for systems placed in service between now and December 31, 2019.
  • A measured step-down in credit value is scheduled for each year following, so if you’re after the complete 30% credit, you’ll have to act right away.
  • Retrofit systems are accounted “placed in service” when they’re completely installed and ready for use.
  • Systems for newly built or newly renovated homes are considered “placed in service” at the time you, the homeowner, take occupancy of the home.
  • The home doesn’t have to be your main residence.
  • Your geothermal heat pump must fulfill all federal ENERGY STAR criteria.
  • To receive the Residential Energy Efficient Property Credit, you should fill out and file IRS Form 5695.

For more specifics, read our blog as well as this WaterFurnace®-generated piece, Understanding the Federal Incentives for Geothermal Heat Pumps.

Though it’s obvious that we at Energy Efficiency Associates would be pleased to see you get a geothermal heating and cooling system for your Alaska home, we cannot legally endorse any financial strategy for doing so. We can, however, recommend that you get together with a local tax professional. He or she can direct you on how best to capitalize on geothermal tax credits given your singular financial situation.

If you’d like to discover more about what other energy-related tax incentives might apply to you at the federal, state, and local levels, go to dsireusa.org. This is an unusual resource that has state-by-state information on heaps of policies and incentives advancing  renewable energy and energy efficiency.

And remember: When you’re ready to install a geothermal heating and cooling system in your home, depend on the Alaska geothermal experts at Energy Efficiency Associates. We’ll get the job done right – to help you start saving both energy and money right from the start.