Residential Geothermal Incentives

Residential Federal Tax Credit Expiring at end of 2025.  NYS Residential Geothermal Tax Credit and Utility Rebates, will remain.

With today’s incentives, more residential customers can afford the most efficient heating and cooling systems available.

System Economics

For Upstate NY homes heated with Propane, Heating Oil, or Electric Baseboard

• A geothermal system will save 40-75% on annual heating and cooling costs.
• The savings alone often cover any monthly loan payment or increases in mortgage.
• Payback periods are typically 5 to 8 years for retrofit and 3 to 5 years for new homes.
• Electricity used by the heat pump can be offset by renewable Photovoltaic (PV) Solar.

30% Unlimited Federal Tax Credit – Residential (expires end of 2025)

On August 15, 2022 the Inflation Reduction Act (IRA) was signed into law extending the federal tax credit for geothermal heat pumps in the residential sector. Credits were originally extended to December 31, 2032, but the BBBA cut them back, so not ending on December 31, 2025.

Note: Commercial building geothermal credits were retained though the BBBA.  These federal tax incentives are more complicated but are generally increasing to 30% through 2032, though there are several factors which could increase or decrease the commercial buildings credit.

25% New York State Tax Credit / Cap of $10,000 – Residential

In the NYS Budget passed in April of 2022, a NYS Income Tax Credit of 25% with a cap of $5,000 was put in place for qualified residential geothermal heat pump systems. This was further extended to $10,000 per household in 2025.  Key eligibility criteria include the residence needs to be in NYS and is the taxpayer’s residence at the time the geothermal energy system is placed in service. If you have limited NYS tax liability, the credit can be used over five (5) taxable years.  Be sure to check with your tax or financial advisor about your ability to take advantage of the NYS Geothermal Tax Credit. Starting in 2026, lower income homeowners may be able to consider the NYS Geothermal Tax Credit “refundable” meaning you do not have to have sufficient NYS tax liability to be sent a refund check for the balance of the full $10,000 credit.  

Geothermal Electric Utility Rebate Programs !!

The amount of funding available to each project will depend on its size and the heat pumps capacity. Smaller projects (e.g., residential and small commercial buildings) get $1,500 to $2,000 per 10,000 BTU of the heat pump for most utility areas we cover.  So a typical 4 ton residential system will qualify for about $6,000. Larger projects (e.g., multi-family, hospitals and college campuses) are custom measures based on annual site energy savings. 

Starting in 2026, the utility rebates will be a fixed amount per residence – no longer based on the size of the system. Check with your utility or ask us for more details.  

There are also rebated for hot water generators (called desuperheaters) and heat pump water heaters.  We’ll be sure to include any additional rebates in our estimate to you.

To learn more about how Aztech Geothermal can help you take advantage of available incentives, and save on home energy heating and cooling, please don’t hesitate to contact us today!

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