Available Incentives
Section 48 Investment Tax Credit
The Section 48 Investment Tax Credit (ITC) provides a federal tax credit for geothermal heat pump systems. The base credit is 6% of eligible project costs, but this increases to 30% if the project is under 280-tons or meets prevailing wage and apprenticeship requirements. Additional bonus credits, each worth up to 10%, are available for projects located in energy communities or for using domestic content. Under the Inflation Reduction Act, these enhanced credits were extended and clarified, and more recently they were retained in full under the One Big Beautiful Bill Act, ensuring continued support for the installation of geothermal heat pump systems.
Section 48E Thermal Storage
The Section 48E ITC applies to qualified thermal energy storage systems, including emerging long-duration technologies such as ice‑based or molten‑salt storage integrated into HVAC systems. Like the tax credit for geothermal heat pump systems, the base credit is 6% of eligible project costs, rising to 30% if prevailing wage and apprenticeship requirements are satisfied. Projects may further qualify for bonus adders of up to 10% each for domestic content, location in an energy community, or serving low‑income communities. As confirmed in the “One Big Beautiful Bill” (OBBB), Section 48E remains intact and fully available, continuing the technology-neutral support first provided by the Inflation Reduction Act and specifically preserved under HR‑1.
