The American Recovery and Reinvestment Bill of 2009 has increased the tax incentive for homeowners installing geothermal heating.

Previously, any residential installation of a ground loop or water geothermal heat pump was eligible for a credit of up to $2000. The new bill increases the tax credit to 30% of the cost with no limit, making geothermal heating increasingly attractive to those concerned with limiting their carbon footprint and lowering their energy costs in a new or older house plan.

The new incentives are retroactive to geothermal heat installations that occurred on Jan 1, 2009 and will be in effect until Dec 31, 2016. In order to qualify for the tax credit, the installation must meet Energy Star requirements, which can be determined by the contractor who installed the system. Home owners that plan on claiming the tax credit should keep their receipt with a note that the unit meets the requirements in case of an audit.

Home owners can view other tax incentives for renewables and efficiency here.

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