The geothermal industry went to Washington, D.C., numerous times looking for a victory, and it finally left with a huge win. Feel free to read that sentence again because it is rare for an entire industry to rally together and push a ball that big up the hill.

I am, of course, talking about the tax credits for geothermal that were recently passed. There will be a 30 percent income tax credit for residential installation of a geothermal heat pump in 2018 and 2019. It is also retroactive to 2017. It then drops to 26 percent in 2020 and 22 percent in 2021. It ends Dec. 31, 2021.

On the commercial side, the 10 percent investment tax credit is also retroactive to 2017. It remains at 10 percent throughout the four-year period.

I, for one, was shocked this happened. After years of the U.S. government playing Lucy while the geothermal industry took on the role of Charlie Brown, I was telling anyone who would listen that these tax credits were not coming back. When you looked at the makeup of the executive and legislative branches, I viewed it as a long shot at best. I preached that it was time to move on and concentrate on a different technique for selling geothermal.

But you know who didn’t give up? The leaders in the geothermal industry. Kudos to them. This has been a long journey, and everyone involved should take a curtain call. There were too many setbacks over the course of the process to name them all, but some that come to mind are the “drafting error” in December 2015, when an Omnibus bill was passed that extended solar and wind tax credits while the geothermal folks were left out in the cold, and then there was the Federal Aviation Administration reauthorization bill that passed with no amendments — including one that would have extended the geothermal tax credits.

But the leaders of the industry never gave up. I recently talked with Doug Dougherty, president and CEO of the Geothermal Exchange Organization (GEO). He said the day the tax credits were passed was the happiest day of his geothermal career. To show how hard Dougherty worked, after the vote, he gathered the business cards of all the senators, members of congress, and staff that he had met with about the tax credits through the process. He laid them out on his dining room floor and took a picture. There were 312 business cards.

Then there was the president of Enertech Global, Steve Smith, who made a very impassioned point. In a meeting with South Dakota’s Rep. Kristi Noem, Smith pulled out a company Christmas picture from 2015. It had a little over 60 people in the picture, but Smith had whited out 22. Those were the 22 people who were laid off in 2017, as the residential geothermal industry saw a 45 percent decrease in sales. What a powerful message.

The key was that all sections of the industry came together. The Air-Conditioning, Heating, and Refrigeration Institute (AHRI); Heating, Air-conditioning & Refrigeration Distributors International (HARDI); and ACCA all put in time on Capitol Hill. That is the kind of team effort this industry will need going forward. The debate over regulations will undoubtedly continue as we progress through 2018. While some people might believe this industry is against regulations, that could not be further from the truth, according to Stephen Yurek, president and CEO, AHRI.

“This industry is all about the environment and improving the efficiency of the equipment,” he said. “We are for regulations. We just want good, smart regulations.”

It is up to the leaders in this industry to continue to tell their story. The three aforementioned associations have done a great job in this area as of late. Hopefully, they will have similar success in the geothermal industry.

Publication date: 3/26/2018

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