Federal Tax Credits: Geothermal Heat Pumps

Geothermal heat pumps are similar to ordinary heat pumps, but use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water.  Because they use the earth's natural heat, they are among the most efficient and comfortable heating and cooling technologies currently available.


Must meet the requirements of the ENERGY STAR program which are in effect at the time of the expenditure.  Tax credits includes installation costs.

     Water-to-Air      Water-to-Water      Direct Expansion
   Closed Loop:    Closed Loop: EER >= 16
       EER >= 17.1        EER >= 16.1 COP >= 3.6
       COP >= 3.6        COP >= 3.1  
   Open Loop:    Open Loop:  
       EER >= 21.1        EER >= 20.1  
       COP >= 4.1        COP >= 3.5  



  • COP (Coefficient Of Performance) - of a heat pump is the ratio of the change in heat at the "output" (the water reservoir of interest) to the supplied work.
  • EER (Energy Efficient Ratio) - The higher the EER rating, the more energy efficient the equipment is. This can result in lower energy costs. This DOE site can show how to calculate potential energy costs savings of a more efficient unit.

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