Did you miss the opportunity to claim the Federal tax credit for energy efficiency? For many home improvements including HVAC systems, insulation and water heaters, the 30 percent tax credit up to $1500 expired December 31, 2010. These tax credits were extended, but reduced to only 10 percent and only up to $500. However, you can still get the full 30 percent tax credit if you install a new qualifying geothermal heat pump system.
The tax credit for geothermal heat pump systems doesn’t expire until 2016. Here are some important details you should know:
- The tax credit covers 30 percent of the total cost for a qualifying system.
- There is no upper limit to the credit amount.
- The credit Includes installation costs.
- All ENERGY STAR geothermal heat pump systems qualify for the credit.
- Water-to-water geothermal heat pump systems are also eligible.
- The geothermal heat pump system must be installed in a home you own and occupy.
Rental homes do not apply, but second homes are eligible.
Just like other heat pumps, geothermal heat pump systems work by moving heat from one location (the source) to another (the sink). The difference is that instead of using outside air, they use the ground as the source or sink, depending on the season. During cold Cleveland winters, heat is drawn from the ground to heat your home, and in the summer, heat is removed from your home and pumped back into the ground to cool your home.
Because geothermal heat pump systems use natural heat from the earth, they are some of the most energy efficient heating and cooling systems available. Most units are also able to provide hot water for your home, too.
You still have plenty of time to take advantage of the tax credit for geothermal heat pump systems, but with the energy (and financial) savings you will gain, why wait? Remember that a tax credit is a direct dollar for dollar reduction of your taxes due- far better than a tax deduction that simply reduces your taxable income.
If you’re not sure if a geothermal heat pump system is right for your home, ask us! P.K. Wadsworth professionals are always available to answer your questions about how to improve energy efficiency and to help you find the perfect solution for your heating and cooling needs.
PK Wadsworth services the Greater Cleveland, OH area including cities Chagrin Falls, Shaker Heights, Eastlake or anywhere in between. To get started, check out our website.