Commercial Financing & Incentives
There are several Federal and State incentive programs for geothermal heating and cooling systems for both new and retrofit commercial buildings. Commercial incentives can appear a bit complex at first glance but their implementation is fairly straightforward once you sort it out. Contact John Ciovacco at Aztech for how it applies to your project.
Unlimited Federal Tax Credit – Commercial
On August 15, 2022 the Inflation Reduction Act was signed into law increasing and extending the federal tax credit for geothermal heat pumps in the commercial sector. The structure has some complexity but most commercial buildings will be eligible for a 30% unlimited federal tax credit. In addition for-profit businesses are eligible for accelerated depreciation and may be able to expense the depreciable amount of the system fully in the year it was placed in service. There are adders to the tax credit of 10% for using “domestic content” and in special cases an additional 10% for qualified “energy communities”. As a result many projects will be eligible for a 40% tax credit and a few up to 50%. A new provision allows tax-exempt and state & local government organizations to receive a “direct payment” worth the value of the federal tax credit. These credits (or direct payments) and depreciation allowances have been extended to December 31, 2032. For details about how federal tax credits may aid your project, send us a note. We’ll do our best to give you the latest information and guide you to resources to take advantage of these federal incentives for your organization.
The federal residential geothermal heat pump tax credit is also 30% and has a more straightforward eligibility criteria. For details see our Financing & Incentives for Your Home.
Utility NYS Clean Heat Rebate Program
The amount of funding available to each project will depend on its size and the heat pumps capacity. Larger projects with a heat pump capacity over 300,000 BTUH (i.e., approx. 30 tons) receive $80 million BTUs (MMBTU) saved relative to a baseline system for National Grid, NYSEG and Central Hudson. If the building has envelope upgrades (e.g., added insulation, air sealing, upgraded windows, etc.) it may qualify for $100/MMBTU saved annually. Smaller projects below a certain heat pump capacity (e.g., residential and small commercial buildings) are granted $1,500 per ton for National Grid & NYSEG with $2,000 per ton for Central Hudson.
There are additional eligibility rules and other categories of clean heat rebates beyond those stated here. Contact us to get a sense of your project’s eligibility and estimated rebates from your local electric utility.
NYSERDA’s New Construction Program
The New Construction – Commercial Program from NYSERDA may aid your project with technical assistance to evaluate and design energy efficiency options, cash back for installation of cost-effective electric efficiency measures including geothermal heating and cooling in new or substantially renovated buildings. Additional incentives are also available for green buildings, solar technologies, industrial and process efficiency, and demand response.
Financial incentives are based upon the anticipated energy performance of the building relative to the Energy Code requirements. Actual incentives are based upon the anticipated energy performance of the building. Incentives cover a significant portion of the incremental costs of energy efficiency measures. Incremental costs are defined as the cost difference between the installed high efficiency equipment and the equipment that meets Energy Code requirements.
Other NYSERDA Programs for New and Existing Buildings
NYSERDA has a broad array of programs to lower energy bills and promote clean energy solutions for all types of buildings. Visit the NYSERDA website for a more complete and updated list of programs. https://www.nyserda.ny.gov/
Aztech's President, John Ciovacco gave an overview to the Utility Networked Geothermal Collaborative on the recently released Utility Thermal Energy Network and Jobs Act (UTEN) implementation order. Continue