2006 Energy Bill

The United States Energy Bill Offers Incentives for Geoexchange

After years of waiting, President Bush signed the bipartisan Energy Policy Act of 2005 in Albuquerque on Monday, August 8, at a signing ceremony held at Sandia National Laboratories. This new multi billion-dollar National Energy Plan is the first signed into law in more than a decade, and comes to us at a time when new energy-related policy is more critical than ever. Among the many features of this 1,724-page law, Congress has provided new incentives for geoexchange.

Sec. 1333 Credit for certain non-business energy property (page 1351)
One of the highlights of the new bill addresses homeowners, who are granted up to $300 in tax credits for the cost of new Geoexchange systems. To be eligible, the standards that must be met are 14.1 EER & 3.3 COP for closed loop, 16.2 EER and 3.6 COP for open loop and 15 EER and 3.5 COP for DX. However, the system must include a desuperheater or integrated water heating to meet the credit's criteria.

Sec. 206 Renewable Energy Security (page 179; definition on page 176-177)
It is also important to note that the section covering renewable energy security offers a 25 percent rebate, up to $3,000, for renewable energy systems that "(i) when installed in connection with a dwelling, transmits or uses- (I) solar energy, energy derived from the geothermal deposits, energy derived from biomass, or any other form of renewable energy which the Secretary specifies by regulations, for the purpose of heating or cooling such dwelling or providing hot water or electricity for use within such dwelling..." The Consortium is now working to ensure geoexchange is not excluded from this definition, which could bring an even greater interest to our technology.

Sec. 105. Energy Savings Performance Contracts (page 40)
Furthermore, this bill extends energy savings performance contracts from 2006 to 2016.

Sec. 1332 Credit for construction of new energy efficient homes (page 1334)
Provisions also offer credit for construction of new energy efficient homes, up to $2,000, for homes that cut energy use for heating and cooling only (no hot water) by 50 percent compared to the national model code - the 2004 International Energy Conservation Code Supplement (assuming an SEER-13 air conditioner). Producers of manufactured homes can also qualify for a tax credit of $1,000 for homes that save 30 percent.

Sec. 1331 Energy efficient commercial buildings deduction (page 1332)
Another highlight of the new Energy Policy Act addresses commercial facilities by awarding energy efficient commercial buildings deductions of up to $1.80 per square foot for buildings that achieve a 50% reduction in annual energy cost to the user, with partial credits offered at $0.60 psf. This reduction amount is compared to a base building defined by the industry standard ASHRAE/IESNA 90.1-2001.