There are two significant government incentives available to reduce the net cost of installing a residential geothermal (ground source heat pump) heating & cooling system:
If you pay a monthly “system benefit charge” or SBC to your electric utility, they offer a rebate for a qualified installation of a ground source heat pump system. (RG&E, NYSEG, and National Grid electricity customers pay the SBC; municipal electric, e.g. Spencerport Municipal Electric and Fairport Electric, customers do not and, therefore, are not eligible for this incentive.) The system must be designed and installed by NYSERDA-qualified contractors, such as Lake Country Geothermal. The rebate is paid directly to the contractor, who applies all but up to $500 of it as a credit toward the installation price invoiced to the client. The rebate is worth $1500 per 10,000 Btu/hr of heat pump heating capacity less up to $500 at the contractor’s discretion. A typical home requires 30,000 to 60,000 Btu/hr of heat capacity, so most rebates are worth between $4500 and $9000. Application is made by the contractor on behalf of the client and is typically applied for and approved before the project begins. The project must be completed, and start-up performance data submitted within 12 months of approval for existing buildings and within 24 months for new construction. This program is expected to continue through 2024.
The Federal government offers a tax credit for qualified geothermal system installations. For residential installations completed by December 31, 2022, the credit is 26% of qualified costs; for installations completed in 2023, the credit is 22%. Commercial installations started before January 1, 2024 are eligible for a 10% tax credit and MACRS 5-year accelerated depreciation. The client is responsible for applying for this incentive at the time (s)he submits tax returns. See IRS Form 5695 https://www.irs.gov/pub/irs-pdf/f5695.pdf for more information.
We suggest that you contact your electric utility, as they may also offer additional incentives.
Please visit the Database of State Incentives for Renewables & Efficiency (DSIRE) website https://www.dsireusa.org/ for the latest state and federal incentives and rebates.