Installing a qualifying geothermal heat pump (GHP) before the end of 2016 entitles you to a 30 percent tax credit. The federal government is offering this credit since GHPs represent the most energy efficient way to cool homes and buildings. Although they cost more to install than other kinds of HVAC systems, the energy efficiency they offer pays for these systems. When combined with the generous tax credit that has no upward limit, the payback period is even shorter.
A GHP moves heat from your home and places it underground or into a nearby water resource. The temperatures underground change little throughout the year and the GHP doesn’t have to work as hard to cool or heat your home. They use an underground loop field and an indoor heat pump to transfer heat from your home in the summer and back to your home in the winter for year-round comfort.
The provisions of the tax credit allow you to claim the cost of the GHP and its installation, although the optional auxiliary heating element and the ductwork doesn’t qualify for the credit. In addition, the geothermal heat pump must meet the Energy Star’s guidelines for the GHP at the time it’s installed. You can receive the credit for installation in existing homes, new construction and second homes. Rental homes do not qualify.
Besides taking advantage of the tax credit, when you install a GHP, you can look forward to a system with a long lifetime. The loop field usually has a 50-year warranty and the indoor heat pump can last 25 years or longer as long as it’s carefully maintained.
In the past, installations were limited to homes with large yards where the loop field was installed horizontally. Now, however, it’s possible to dig a vertical loop field for homes with smaller yards. This option also works if you don’t want your landscaping or other yard features disturbed.
To learn more about using the tax credit for a geothermal heat pump and the system’s benefits, contact Roth Heating & Cooling. We’ve provided HVAC services for Portland area homeowners since 1976.