While federal energy tax credits for most kinds of HVAC equipment and weatherization upgrades expire on Dec. 31, 2013, tax credits for geothermal heat pumps remain active until the end of December 2016. Geothermal systems are among the most efficient heating and cooling systems, making them the system of choice for homeowners who want to reduce energy bills substantially.
In order to qualify for these federal tax credits, the system must meet the minimum Energy Star efficiency standards that are in place at the time of installation. As of 2013, these standards for geothermal heat pumps are:
Water-to-air open loop: The cooling efficiency must be 21.1 EER (energy efficiency ratio) or higher. The coefficient of performance (COP) must be 4.1 or higher.
The COP is a useful rating because it indicates how much energy the system uses to move heat from one unit of energy. A COP of 4.1 means that the system is capable of moving 4.1 units of heat either inside or out for each watt of electricity it uses. In contrast, electric resistance heaters have a COP of 1.0, meaning they can produce one degree of thermal change for each unit of energy they use.
Water-to-air closed loop: The EER must be 17.1 or more and the COP 3.6 or higher to qualify for the tax credits for geothermal.
Water-to-water open loop: The EER must be 20.1 or more and the COP 3.5.
Water-to-water closed loop: The EER must be 16.1 or greater, with a COP of 3.1 or better.
Which type of system is best for your home largely depends on the geology and hydrology of your property.
The tax credits for a geothermal are generous. Homeowners can take the credit for a new or existing home, along with second homes. You can deduct 30 percent of the equipment and its installation cost, with no cap on the amount you can claim. These credits help cut the cost of these systems substantially.
To learn more about federal tax credits for geothermal heat pumps, please contact us at Ace Hardware Home Services. We’ve provided top-notch HVAC services for homeowners in the Dayton area since 1978.
Our goal is to help educate our customers in Dayton, Ohio about energy and home comfort issues (specific to HVAC systems). For more information about tax credits and other HVAC topics, download our free Home Comfort Resource guide.
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