Tax Credits for geothermal heating in pennslyvania

Geothermal Tax Credits | The Ultimate Guide

Geothermal heat pumps, which utilize renewable energy, are a long-used heating source for homes in the U.S. In fact, since the 1940s, geothermal heat pumps have offered a greener alternative to electric- and gas-powered heating/cooling systems for homeowners.

These systems use a pipe-loop buried vertically underneath the ground beside the home. This earth pipe-loop gathers the energy held below the earth’s surface and transfers that energy into the home that provides heating and or air conditioning. There are two types of geothermal heat pumps: Water-to-water systems and water-to-air systems. Water-to-water systems are used to power hydronic radiant heating systems, while water-to-air heating systems power forced-air heating ducts. In most cases, GHPs also will provide most of the domestic hot water for the home.

Today, with rising energy costs, geothermal heat pumps make more sense than ever. Not only will updating your home’s HVAC system with a geothermal heat pump lead to substantial energy bill savings. Years past they had a substantial tax credit. ENERGY STAR rated geothermal heat pumps were eligible for a 30% federal tax credit, including cost and installation, and there was no maximum for the credit.  

What Types of Geothermal Heat Pumps Qualify?

Both types of geothermal heat pumps qualified for the 30% federal tax credit, but they must be ENERGY STAR certified. All ENERGY STAR certified GHPs are eligible for the credit, and there are numerous options to use. ENERGY STAR has provided this comprehensive list of eligible heat pumps, which you can use to research models.  Also, unlike in the past, qualified GHPs no longer have to provide a percentage or all of the home’s hot water supply to qualify.

Although GHPs may cost more upfront than traditional heating system, they do greatly reduce home energy costs. In fact, all ENERGY STAR certified models are more than 45% more energy efficient than traditional HVAC options.

There is no tax credit at present for 2017 but could change at a moment’s notice depending on our Government agencies’. Currently, the geothermal tax credit is in effect through 2016, and expires on December 31, 2016.  

Homeowners apply for the tax credit when they file taxes for the installation year. IRS Form 5695 for Residential Energy Tax Credits. A more detailed summary of Form 5695 is available from the IRS.

Pennsylvania Specific Geothermal Rebates

There are many rebate programs available in Pennsylvania for geothermal customers. If you are provided power by one of the following companies, you may qualify:

  • Allegheny Power
  • Duquesne Light Company
  • Met Edison
  • PECO Energy
  • Penelec
  • Penn Power
  • PPL Electric Utilities

If you are unsure what you qualify for, feel free to checkout this tool to learn more.

Want to learn more about the benefits of geothermal heat pumps for your home? Contact Comfort Pro  today. We install and service a wide variety of GHPs


HVAC technician charging a heat pump with refrigerant

Common Heat Pump Problems

Geothermal heating has two main selling points:

  1. It has a much lighter strain on the environment than fossil fuel burning systems 
  2. It’s relatively maintenance free

It’s hard to argue against the first point as a series of loops underground that harness the constant temperature of the Earth and turn it into a sustainable way to heat your home is much better than most alternatives. The second fact, though, is debatable because although the tubes deep underground will likely never need servicing, there are some common heat pump problems that will be encountered over the years, particularly dealing with the above-ground portion.

Here are five common heat pump problems and how to fix them:

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maintenance engineer checking technical data of heating system

How to Choose a Heating System

With the brisk cold fronts on their way to sweeping across the country this winter, people are thinking more about adequate, cost-effective heating. Whether you need to replace an old, noisy home heating system or you want to upgrade to a more efficient form of energy, there are several factors that can help you decide how to stay warm and toasty.

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Geothermal Energy vs. Solar Panels: Which Has Better Value?

“Going Green” is no longer just for progressive thinking homeowners or those looking to live in a commune and proverbially go off the grid. Instead, having energy efficient property is now an integral part of being a responsible homeowner, not only to lower utility bills, but also as a crucial way of limiting a carbon footprint against an increasingly unpredictable environment.

The best way we can lower our impact on the environment (and save some money in the process) is by harnessing the Earth’s resources to heat and cool our homes and businesses. The two main ways to use the Earth’s free energy for your own good are with solar panels and geothermal pumps. Solar panels capture the sun’s rays and convert it into heat and electricity, which is used to heat and cool your home, while geothermal solutions use the constant core temperature of the Earth to warm and cool a property.

Geothermal vs Solar

The big question remains then: which method offers more return on investment between solar panels and underground geothermal pipes? The answer is provided from a combination of your climate, your existing setup, and how much you’re prepared to invest.

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A traditional heat pump next to a house showing comparison to geothermal heat pump.

Geothermal Heat Pumps vs. Traditional Heat Pumps

The main concept of geothermal energy is one that’s relatively easy to grasp. For example, the Earth has a constant core of 50°-60°F at all times no matter the temperatures above ground. It makes sense then that we can harness that energy and use it to heat or cool our homes, but here’s where the process gets a little murky – not so much a matter of why, but how?

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A geothermal heating and air conditioning checkilist showing the benefits of geothermal heating system.

Geothermal Energy Pros and Cons

Instead of using natural gas or oil and as an alternative to incurring high electricity bills, geothermal energy works to draw off the Earth’s constant core temperature to both heat and cool the home. At first glance, incorporating geothermal energy into a house or business would seem like a no-brainer and while there are definite cost and economic savings involved with the process, all that glitters isn’t gold. Here are the definitive geothermal energy pros and cons:

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A green grassy landscape and green leaves emerging from the top representing the green effects of geothermal heating and the maintenance it requires.

Geothermal Maintenance

One of the main benefits of a geothermal heating system, besides economic friendliness, is a relative lack of maintenance. A majority of the geothermal components are buried underground so much like a radiant underfloor heating system: What you can’t see you can’t maintain (because the parts shouldn’t go wrong). The lack of maintenance perception is a common misnomer because all heating systems need regular upkeep, especially ones that feature a conventional duct work and air handler as the geothermal pumps do. The required maintenance shouldn’t be a deal breaker in purchasing a system though, because the savings still produce roughly $5 of heat for every $1 of cost. Here’s just an idea of what you should do and expect to maintain those high savings ratios:

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A large pile of US dollars with blues skies in the background representing geothermal heat pump savings in Pennsylvania.

Geothermal Savings in PA (Tax Incentives, Grants, and More)

In recent years, geothermal heat pumps have gained popularity. However, the cost of installation for geothermal heating is still more expensive than other forms of heating and cooling. Don’t let this initial cost scare you, though, as the cost to run the systems over time will result in savings that pay for the system in full. Most families see savings of equivalent or greater value to the cost of the installation within 5-7 years.

The savings aren’t the only assistance available out there. The government is pushing for renewable energy sources in residential and commercial establishments. For many families, the only way they could install the system is with financial assistance. Fortunately, there are a lot of tax incentives for you to take advantage of out there, including federal and state tax incentives. Read More