Residents of Massachusetts can now rejoice at the availability of geothermal tax credits designed to save them money by investing in geothermal technologies for their homes. While the initial cost of drilling a geothermal well and installing a heat pump can seem hard to swallow, the truth is that you can expect to see up to 30% of your money come back in the form of federal and state-level tax credits, and the remainder of your money will be returned as you can expect to cut your power bill drastically each and every month.
How Geothermal Systems Work
Geothermal heating systems use the ambient temperature at the core of the earth to circulate heat up into your house without burning oil or other fossil fuels. This is done by drilling wells beneath your home and inserting pipes down to the level of the nearest aquifer. These pipes will pick up the natural heat of the earth in the water, and circulate it up into your home using high-efficiency pumps. While the system does burn a small amount of electricity, it is less than half of what a standard air conditioner uses, and there is no additional fuel input needed. There are several varieties of geothermal systems designed for different size installations and space limitations.
The MassCEC Credit
Recently the Massachusetts Clean Energy Center has introduced an initiative to that would put more than $30 million into clean heat solutions for homeowners and business owners. With credits ranging from $750 all the way up to $12,500, nearly any building can be fitted with a geothermal system. It is thought that each geothermal system is capable of heating your house for approximately a third of the cost of a traditional electric or gas based heater year round. The size and type of system you install will determine the size of your tax credit at the end of the year, with most money going toward whole home ground-source heat pumps.
Federal Tax Credits
In addition to the MassCEC initiative, there is also a federal level program called the Residential Energy-Efficient Property Credit. This credit allows home owners to earn a credit of 30% off of the cost of their system. There is no cap on this federal credit, so no matter how big of a system you install, your whole bill will qualify. However, the federal credit does not apply to duct work or heating systems used for pools and hot tubs, so any additional features you have done will not be eligible for the credit.
Time is Running Out On Geothermal Tax Credits
If you are looking for a more efficient way to heat your home and spend less on a monthly basis, geothermal is a great option. The investment in a new system can quickly be offset by the MassCEC and federal tax credits which will instantly reduce your bill by more than 30%. After you have the system installed you can expect to cut your heating bill nearly in half as the system requires no fossil fuel and only a fraction of the electricity that older heaters required. It is important to take advantage of the tax credits while they last because they could change in future years as geothermal technology becomes more common.