Geothermal heat pumps exchange heat energy between your home and the earth, and they are the most efficient and long-lasting heat pump systems available. While sufficient land or water source is required, perhaps the most significant obstacle to installing a geothermal system has been the cost.
There is good news, however, along with a stable and free heat-energy source, all Energy Star-qualified geothermal systems are eligible for Federal geothermal tax credits through the end of 2016.
All heat pump systems provide home heating and cooling by extracting and moving heat energy between the home and a medium outside the home. The most common type of heat pump, air-source, is excellent for cooling and supplemental furnace heating in our Traverse City region, but lack the stable heating power and energy source of geothermal systems.
Following are some of the perks of installing a geothermal system:
- Geothermal systems are proven to last for decades.
- With no noisy compressor/condenser cabinet outside a window, geothermal systems are very quiet.
- You may enjoy a boost in home value with a geothermal system.
- You may also enjoy hot water heating for a fraction of the cost of electric water heaters.
- Take advantage of geothermal tax credits of 30 percent of purchase and installation costs with no upper limit.
Geothermal Tax Credits
Since geothermal tax credits are just that — a credit and not a deduction — there is sweet financial incentive (above and beyond years of energy savings) to do a little digging into geothermal systems. Following are the precursors and criteria for going geothermal:
- You’ll need adequate land area, however, a vertical geothermal build, or dig, can be installed in a much smaller area than horizontal.
- The tax credit is available for residential properties (no rentals), and second homes qualify, too.
- All Energy Star-qualified geothermal heat pumps qualify.
- 30 percent of purchase price, materials and installation costs count towards the total credit amount (cost of new or retrofitted ductwork is not eligible).
If you have any questions about geothermal tax credits and systems, the professionals at Team Bob’s Heating Cooling Plumbing are here to help.
Our goal is to help educate our customers in Traverse City, Michigan and surrounding areas about energy and home comfort issues (specific to HVAC systems). For more information about geothermal tax credits and other HVAC topics, download our free Home Comfort Resource guide.
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