Tax Credits Available!The following are tax credits available for new construction or existing homes

Geothermal Heat Pumps

Geothermal heat pumps place into service between now and December 31, 2016 are eligible for a 30% of the cost tax credit.  This means that if you install a Geothermal system at a cost of $21,000.00 you will be eligible for a rebate of $7,000.00 on your taxes.  This is cash in your hand.  The system must meet Energy Star requirements to qualify for the tax rebate.  The closed loop system must have an EER>= 14.1 and COP>=3.3 and the open loop system must have an EER>= 16.2 or a COP>=3.6. 

The EER is the Energy Efficiency Ratio.                          
The higher the energy efficient rating the more
efficient the equipment is. The EER measures
the efficiency of the equipment in the cooling mode.
It is the ratio of total cooling capacity over the electrical
energy input.

The COP is the Coefficient of Performance.  The COP is the measure of efficiency in the heating mode.  It is the amount of heating capacity produced per amount of energy used. The higher the COP the more efficient the heat pump.

A good example of this is if you have a heat pump with a COP of 3.3 it produces 3.3 units of heat per unit of energy it uses.  Contrary a 90% gas furnace produces less than one unit of heat per energy unit used.

When considering a Geo Thermal heating system be sure to include all cost calculations into your formula.  In our state of Michigan, some natural gas providers charge extra to install gas into new construction if you are using a Geo Thermal heating system.  If a gas forced air system is not the primary source of heat for a new home, you will pay top rate for the install of the gas line to your house.  In some cases it has been as high as $1,500.00 extra.  These costs will have a definite effect on the length of your payback period for a Geo Thermal system.

The two basic types of Geo Thermal heating systems are the closed loop system and the open loop system.  Both have advantages, but typically if you have the land area - typically 3/4 of an acre available for the field, you can use the closed loop system, and if you have less land and have the ability to discharge water you can used the open loop system.

For more information go to www.energystar.gov/taxcredits