Geothermal Systems - How Tax Credits Have Made Them Affordable
We get many questions on geothermal systems, particularly from homebuyers interested in a greener approach to their new home. Top questions include affordability and steps to installation for a geothermal system.
How Much Does a Geothermal System Cost?
A geothermal heating and cooling system in the Triangle area generally starts at about $8,000 per ton, installed. This compares to a cost of about $2,000 per ton for a traditional HVAC system.
Example Geothermal System
Just to make the numbers easy, let's look at a 3000 sq ft home. A 3000 sq ft home generally requires about a 5 ton system.
Traditional HVAC system -
5 tons at $2,000 each
$10,000 for total system - Traditional HVAC
Geothermal Heating and Cooling system -
5 tons at $8,000 each
$40,000 for total system - Geothermal Heating and Cooling
Geothermal Tax Credits
Ok, now we get to look at the tax credits. Remember, you'll want to consult a tax professional, and you will have to wait to get "refunded" for the tax credits. But the savings can be significant.
Federal Geothermal Tax Credit
30% of the cost of the Geothermal System, or $12,000 credit.
North Carolina State Geothermal Tax Credit
35% of the cost of the Geothermal System (with a cap of $8400) - $8,400 credit
Progress Energy Credit
$1200 credit
Cost of Geothermal after credits:
Original price tag = $40,000
- $12,000 Federal Tax Credit
- $8400 North Carolina State Tax Credit
- $1200 Progress Energy Credit
= $18,400 total cost.
Thus after credits, the cost is much closer to a traditional HVAC system. On average, a geothermal system saves 35% on energy costs for COOLING your home versus a standard HVAC system, and 70% on energy costs for HEATING your home versus a standard HVAC system.
Geothermal can be a great part of building green. Again, you'll want to talk with your tax professionals about how the tax credits work, but these credits have made a significant difference this year in the total cost of a geothermal system.
You may also be interested in these popular green building topics:
Green Home Building in the Triangle
What Is Geothermal? Geothermal News and Information
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Thanks for sharing this post with us today. Have a great weekend
Hi Penny -- Thanks for adding some hard #s to it as well as a great outline -- it's always been a mystery to me until right now. Looks like a long-term investment. I ran across one geothermal home for a buyer a few years ago but it was also shaped like a dome with no straight vertical walls and that is what caused him to not be interested, but the geothermal was a huge draw for him.
I wonder what the maintenance/yearly checkup costs are? Same as traditional?
Chris,
Per the experts at Geo Design Group Inc, with more than 400 geothermal systems installed, the costs and requirements for maintanence is lower for a geothermal system.
Geothermal -
Air to Air (Typical HVAC) -
T5his is very good news