It’s not unusual for one to wake up with a headache on Jan. 1, but the headache that greeted the geothermal industry on Jan. 1, 2017, wasn’t caused by excessive late-night celebration. On that date, geothermal systems lost their 10 percent investment tax credit under Section 48 of the Internal Revenue Code (which covers energy tax credits).
While geothermal heat pumps may initially seem complicated to service or troubleshoot for some technicians, with the right training, they will find that these systems are similar to conventional air-source heat pumps.
On Dec. 31, 2016, the 30 percent residential and 10 percent commercial federal tax credits for geothermal heat pumps expired while credits for solar and wind were extended.
HR 1090 — The Technologies for Energy Security Act of 2017 — introduced by Rep. Tom Reed, R-N.Y., would correct a congressional oversight in late-2015 that extended tax credits for solar and wind but left behind “orphaned” technologies, like geothermal heat pumps, fuel cells, microturbines, small wind, and combined heat and power (CHP) when their credits expired Jan. 1 of this year. The Reed bill currently boasts 108 cosponsors, 59 of which are Republicans.
Like last year, this year’s Heating Showcase is split into two parts — residential and commercial. The residential/light commercial information is published in this issue, and the commercial products will be featured in the Oct. 2 issue. Feature-specific information about each individual product is included as submitted by the manufacturers.
The HVAC geothermal industry recently received some good news when Google formed an independent business called Dandelion to get into the geothermal space.
On June 1, President Donald Trump followed through on his campaign promise to pull the U.S. out of the Paris Climate Accord, an international agreement struck last year that calls for long-term worldwide actions to cut carbon emissions and reduce the threat of climate change.
It would be fair to say the geothermal industry is at a bit of a crossroads. Despite being around for more than 30 years, the math says it accounts for less than 1 percent of the HVAC market. And, for the first time since 2007, geothermal contractors are out in the market selling their residential products without a 30 percent tax credit.
The geothermal industry has a lot going on at the moment. Federal tax incentives, or lack thereof, currently dominate the discussion, but manufacturers are releasing new, intelligent geothermal products all the time.
Demand for air source heat pumps is forecast to increase 2.5 percent per year through 2021 to $2.1 billion. Air source heat pumps comprise a significant amount of total heat pump demand, largely due to the easier installation requirements and lower initial costs than geothermal heat pumps. Air source heat pumps also compete more directly with other HVAC equipment and are a viable heating and cooling option in most buildings.