High Hopes for Geothermal Tax Credit Extensions
US Rep Introduces Geothermal Tax Bill
Bill extends tax credits for energy-efficient residential and commercial property through 2021
WASHINGTON — U.S. Rep. Mike Thompson, D-California, a senior member of the House Ways and Means Committee, introduced HR 2412, the New Energy for America Act, which extends Investment Tax Credits (ITCs) for energy-efficient residential and commercial property for five years beyond their current sunset date of Dec. 31, 2016, through the end of 2021.
Starting in 2008, the ITC helped the geothermal heat pump (GHP) industry survive the Great Recession. As the economy and construction industry slowly recover, HR 2412 would extend ITC credits for several clean energy technologies, including geothermal heating and cooling systems, solar, fuel cells, microturbines, combined heat and power (CHP), and small wind.
“The ITC is one of the most important tools we have that supports the deployment of energy saving GHPs in the U.S.,” said Doug Dougherty, president, Geothermal Exchange Organization(GEO). “The GHP industry is ‘facing a cliff’ with the looming expiration of its residential and commercial ITCs at the end of 2016. If the credits are allowed to expire, potential gains for the GHP industry and the nation in a growing economy will be lost.”
Thompson’s bill addresses this by extending residential and commercial ITCs for an additional five years, the point at which many believe the GHP industry will be strong enough to regain the growth it enjoyed before the economic downturn.
“By extending our current 30 percent tax credit for residential GHP installations and 10 percent credit for commercial installations, the industry will have the chance to fully realize the benefits of the credits denied to us by the Great Recession,” Dougherty said.
Because the worst economic collapse since the Great Depression coincided with the start of the ITC in 2008, the GHP industry lost much of its promise of jumpstarting sales and installations, Dougherty explained. “With five additional years of tax credits — coupled with a growing economy and expanding home and commercial construction industry — we hope to finally realize that benefit.”
HR 2412 has been referred to the House Committee on Ways and Means.
Publication date: 6/29/2015