New Jersey Energy-Savers Rejoice:
30% Federal Geothermal Tax Credit Reinstated!

You know that smooth-running, low-maintenance, amazingly energy-efficient geothermal heating and cooling system you’ve been longing for but couldn’t afford? Well, take heart! Because, as of February 2018, the federal government’s 30% geothermal tax credit is now back in effect! And what was once unattainable may now be well within your grasp, be it for a new home you’re building in New Jersey or for the updating of your existing home. You’ll have to act right away, though, because the federal tax credit amount has been set up to drop from year to year through 2021.

Here are the central facts:

  • A full 30% of the ultimate cost of your geothermal system is covered by this credit through 2019. In 2020, then, just 26% of the total cost is covered. And in 2021, just 22%.
  • The federal geothermal tax credit can be applied retroactively to installations that are “placed in service” as of January 1, 2017, or later. A geothermal heating and cooling installation is usually regarded as having been “placed in service” when it’s completely installed and ready for use. If, however, your system is part of a new or newly renovated home, it’s deemed to be “placed in service” when you take up residence.
  • What’s eligible for the tax credit is geothermal equipment that, a) makes use of solar energy stored in the ground for heating and cooling and, b) satisfies all ENERGY STAR requirements at the time of installation.
  • Covered expenditures include labor for onsite preparation, assembly, or original system installation and for the piping or wiring that tethers your geothermal system to your home.
  • There are no set limits to the credit amount.

Like more specifics? WaterFurnace® has assembled them for you in this convenient circular, Understanding the Federal Tax Incentives for Geothermal Heat Pumps. And, of course, your New Jersey geothermal pros at J. Zanes LLC will be pleased to answer any questions you have about this exciting new opportunity to put geothermal heating and cooling to work for you – affordably!