The loophole boosting clean heat under President Trump
The One Big Beautiful Bill Act (OBBBA) eliminated tax credits for homeowners installing heat pumps or other energy-efficient upgrades. However, it preserved incentives for commercially leased geothermal heat pumps and thermal energy storage systems, offering a federal tax credit ranging from 30% to 50%.
How the loophole works
- Homeowners cannot directly claim these tax credits for heat pumps.
- Companies that own geothermal or thermal storage systems can keep the tax credits.
- These companies lease the systems to customers with costs reflecting the federal discount.
Market adaptation and opportunities
Some installers, who previously did not lease equipment, are shifting their business models to capitalize on this incentive. Firms already providing thermal storage in multifamily buildings via commercial partners find this transition especially smooth.
President Donald Trump’s megalaw will soon slam the door on tax credits for homeowners who want to install heat pumps or make other energy-efficiency improvements.
This option represents a rare positive element within the OBBBA, which overall is expected to slow the progress toward replacing fossil-fueled heating with cleaner heat pump technologies.
It’s a rare and under-the-radar bright spot for home electrification in the One Big Beautiful Bill Act (OBBBA).
By enabling companies to lease geothermal and thermal storage systems while retaining tax credits, this loophole may help mitigate the negative impact of the law on clean heating adoption.
Author's summary
This tax credit loophole allows companies leasing geothermal and thermal energy storage systems to sustain incentives, offering a promising, yet limited, boost to clean home heating under President Trump’s legislation.
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