New Geothermal Residential Income Tax Credit Available in South Carolina
On Tuesday, February 16, Governor Haley signed into law Act 134 (R.137, H.3874) to help make residential geothermal equipment more affordable for South Carolinians and to help consumers save 50 to 70% on heating and cooling costs for their homes.
Act 134 provides a 25% state income tax credit for the purchase and installation of geothermal equipment. The credit became effective January 1, 2016 and is available for three years, expiring on January 1, 2019.
Equipment must meet federal Energy Star energy efficiency requirements at the time of installation. Tax payers can take $3,500 annually on their taxes for the credit until their 25% cap is reached. The credit cannot exceed 50% of a taxpayer’s taxable liability in a single year, but the credit can be carried forward for 10 years. The credit will accompany a 30% federal tax credit for geothermal equipment and installation costs.
It is anticipated that there will be tremendous new job growth in the geothermal industryin South Carolina with passage of Act 134. Geothermal installations can create up to 8 jobs per installation with the need for plumbers, borers, well drillers, and geothermal installers to complete an installation. In 2015 approximately 340 residential geothermal units were installed statewide. The industry expects this figure will double in 2016.
Act 134 will also generate growth in the clean energy economy. In 2015 it’s estimated the geothermal industry added $10 million to SC’s economy. Making geothermal systems more affordable, the geothermal residential state income tax credit is expected to generate additional state income tax, unemployment tax, sales tax, and corporate income tax to South Carolina’s economy.