Geothermal Tax Credit

In 2022, the Inflation Reduction Act amended the tax code of sections 25D and 48 for qualifying commercial and residential geothermal installations to receive tax credits up to 30%-50% of cost with additional incentives.

The 30% credit of total geothermal heat pump cost extends through the year 2032 and declines to 26% in 2033, and 22% in 2034. All geothermal projects started within the 2022 tax year and after may qualify. Commercial projects may qualify for an additional 10% for domestic content and another 10% bonus for building within energy communities.

Commercial Geothermal Tax Incentive Guide