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Geothermal Tax Credits: Can I Replace my Heat Pump but Keep the Existing Loop?

 

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Advice provided by: Rob Freeman Jr, LEED AP, Green-Buildings.com
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John asks: If I replace my 20-year old Florida Heat Pump with a new unpressurized system but keep my old loop, do I qualify for the tax credit?

Answer: Hi John, thank you for your question.

That's terrific that you've had a geothermal heat pump working for over 20 years. You must have saved a bundle so far because geothermal systems are among the most efficient and comfortable heating and cooling technologies currently available.

I assume you are asking about the federal tax credit for geothermal heat pumps which is 30% of the total cost (both the product materials and the installation)...?

The majority of geothermal heat pump components and their installation costs (labor) is covered by the 30% federal tax credit. The federal tax credit states that heat pump components certified by the manufacturer in the "Manufacturer Certification Statement" will be covered... so I would think the pump itself is definitely covered. If the loop is still good, there's no reason to replace it that I know of... and it's definitely greener not to.

There may be some add on components that will not be covered, such as an emergency back up system and the ducts... These components are not directly related to the efficiency of the system itself or the key components that are covered.

One thing that is important to note is that your geothermal heat pump must meet ENERGY STAR requirements to qualify for the tax credit... prior to December 1st, 2009, this ENERGY STAR requirement included a rule which mandated having a pressurized system. However, after December 1st, 2009, the rules for requiring a separately installed compressor were eliminated. So you should be all set.

For more information on the rules for the credit for residential energy efficient property from the IRS website, check out this page.

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Expert Advice and Comments

geothermal loop

Mon, 09/12/2011 - 20:17 — Tim (not verified)

If I have to replace my loop which is 12 years old, will the cost of the new loop qualify for the 30% tax credit?

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