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Hickenlooper, Bennet, Colleagues Urge Treasury to Ensure Families and Businesses Can Reap the Benefits of Clean Energy Tax Credits for Geothermal Heat Pumps, Reduce Greenhouse Gas Emissions

Dec 12, 2023

Senators Call for New Guidance to Help More Americans Benefit from Clean Energy Tax Credits in the Inflation Reduction Act

WASHINGTON – U.S. Senators John Hickenlooper and Michael Bennet, along with 13 of their Senate colleagues, sent a letter to U.S. Department of Treasury Secretary Janet Yellen calling on the agency to issue guidance to ensure consumers and businesses can take full advantage of the clean energy tax incentives in the Inflation Reduction Act to deploy geothermal heat pumps (GHP). Passed as part of the Inflation Reduction Act, these incentives can greatly reduce greenhouse gas emissions from home heating and cooling and help make GHP systems more affordable for families and businesses in Colorado and across the country.

“GHPs are among the most energy-efficient heating and cooling systems available for buildings, saving up to 50 percent on annual energy bills compared to fossil fuel-based systems. Currently, GHPs are approximately three percent of the residential HVAC market, and increasing their use can play a central role in meeting climate goals while providing reliable, affordable energy,” wrote the senators. 

The Geothermal Exchange Organization estimates that with this needed guidance from the Treasury Department, GHP systems could help prevent more than 64 million metric tons of greenhouse gas pollution and create more than 90,000 jobs. However, existing Internal Revenue Service (IRS) procedures could severely limit working families’ and small businesses’ ability to take advantage of the tax incentives. In their letter, the senators call on the Treasury Department to release new guidance to ensure more Americans can access this technology by enabling third-party ownership models that allow homeowners to avoid expensive installation costs. Low- and moderate-income households particularly stand to benefit since they can least afford the higher up-front cost of GHPs and would gain the most from their efficiency. 

“The largest barrier to GHP adoption is the up-front cost required to install ground heat exchangers… Third-party ownership models – such as those used for residential solar energy systems – can help make the technology more affordable and accessible,” continued the senators. “We urge Treasury to swiftly take this step to ensure we maximize deployment of GHP systems and the IRA’s climate, energy reliability, and cost-savings benefits.”

In addition to Hickenlooper and Bennet, Tammy Duckworth (D-Ill.), Martin Heinrich (D-N.M.), Sherrod Brown (D-Ohio), Peter Welch (D-Vt.), Tina Smith (D-Minn.), John Hickenlooper (D-Colo.), Richard Blumenthal (D-Conn.), Ed Markey (D-Mass.), Brian Schatz (D-Hawaii), Elizabeth Warren (D-Mass.), Ben Ray Luján (D-N.M.), Amy Klobuchar (D-Minn.), Chris Van Hollen (D-Md.), and Bernie Sanders (I-Vt.) also signed the letter.

The text of the letter is available HERE.


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