Geothermal Goes Mainstream: Q&A with Jay Egg

CB: How has some of the latest legislation impacted the adoption of renewable HVAC technologies such as geothermal?

JE: The federal government, in one fell swoop, eliminated residential tax credits for wind and solar — and geothermal got lumped in with that. So those 30% residential tax incentives without a cap went away, along with other homeowner credits.

At the same time, they really opened the doors for commercial incentives. Commercial projects still get the 30% tax credit, plus an additional 10% for American-made systems and another 10% if the project is in an energy-poverty community or tribal land. You can reach up to 50% in incentives. They also made it easier for developers to fund large thermal energy networks and systems through power purchase agreements.

If you’re a nonprofit or church, you can even receive a check directly if you don’t have a tax liability. The only way for homeowners to get similar benefits now is if their utility pursues a large-scale program and offers on-bill financing. Otherwise, homeowners would need to form a business entity to qualify.

CB: What is driving consumer demand for renewable energy right now? Is it cost savings, sustainability goals, or new regulations?

JE: There are three main drivers for geothermal adoption. First, it’s become widely accepted as a renewable energy source. The Department of Energy and the current administration have embraced geothermal, from heat pumps to large-scale energy plants.

Second, publicity and visibility have grown. Companies like Dandelion Energy are installing thousands of systems in new Lennar homes, and states like New York, Minnesota, and Texas are developing thermal energy networks.

Finally, geothermal systems are increasingly recognized as the highest-quality option — they’re quiet, last longer, and eliminate outdoor equipment. They’re also more efficient and have strong longevity because the systems are indoors, much like a garage-kept vehicle.