What Rocks and What's Not So Hot: U.S. Industry Perception of Geothermal Tax Credits
Nationwide, four U.S. federal tax credits promote the adoption of geothermal heat pumps (GHPs) and geothermal power plants and were recently updated with enactment of the Inflation Reduction Act (IRA).1 However, uptake of these geothermal tax credits has lagged behind other eligible technologies.2 With the support of the U.S. Department of Energy (DOE)'s Geother- mal Technologies Office, researchers at the National Renewable Energy Laboratory (NREL) engaged with the geothermal industry to determine: 1) how the industry will use the tax credits, 2) remaining challenges to utilizing tax credits, and 3) suggestions on solutions that could help accelerate tax credit uptake. Insights were obtained through two industry question- naires (59 responses)3 and 21 interviews with representatives from geothermal industry groups, project developers, com- ponent manufacturers, and financiers, as shown in Figures 1 and 2. This article synthesizes the industry's perception of these tax credits, i.e., Section 25D (residential GHP), Section 48 (commer- cial GHP), Section 48E (investment tax credit [ITC] for electricity), and Section 45Y (production tax credit [PTC] for electricity).