Prospective West Union district geothermal system users can, at present, use each of these financial incentives to reduce the cost of installing a ground source heat pump: a federal tax credit, state and federal accelerated depreciation tax deduction, the Alliant Rebate and a REAP grant. Importantly these cost reducing programs can be used in tandem.
Tax Credits
The Federal Tax Credit for businesses installing geothermal systems is 10% of the total system cost and runs through the end of 2021. There is no Iowa geothermal tax credit for businesses. A reminder that businesses can take advantage of accelerated depreciation to get a tax deduction on both federal and state income tax. The 2017 Tax Cuts and Jobs Act allows for 100% bonus depreciation for systems installed through the end of 2022.
Alliant Energy Rebates
Alliant Energy has rebates on new geothermal systems up to $1200 per ton. This could be up to $6,000 off the cost of a 5-ton system (big enough for a large home or typical downtown business). Alliant caps all their rebates at max of 50% of the installed cost.
Rural Energy for America Program (REAP)
REAP Grants can also help offset the cost of energy efficiency and renewable energy projects. REAP can cover up to 25% of the total cost of the project. The grant application process is open but funding is not guaranteed.