Geothermal Heating & Government Grants

Written by don shepard
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Geothermal Heating & Government Grants
(money makes money image by Andrey Andreev from

Implementing a geothermal heating system requires a higher initial investment than a traditional heat pump system. The costs vary depending on the type, size and site terrain of the system. The pump hardware costs about £4,875 for a typical residence, but the entire investment is often recouped in 2 to 10 years, according to a 2008 Department of Energy article. Understanding government grants can assist in getting funds for geothermal projects.

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Types of Goverment Grants

Various government entities provide grants for geothermal energy. These can differ in both the way they are awarded and in purpose. Some grants are for research and development. Other grants are for start-up costs, and there are grants that are awarded for the amount of conventionally produced energy replaced by geothermal energy.

U.S. Federal Grants

The United States Department of Agriculture's (USDA) REAP grant has a stated purpose to "provide energy audits and renewable energy development assistance." Persons eligible include ranchers, farmers and rural small business owners. It will pay up to 25 per cent of eligible geothermal projects with a minimum of £1,625 and a maximum of £325,000. Past recipients include D.J. Keehner Farms, Inc. of Monana, Iowa, which was awarded £7,514 to replace a propane heating system with geothermal heating. The grant has also been used for rural electric cooperatives.

As part of the American Reinvestment and Recovery Act (ARRA), the U.S. Treasury has created different opportunities for geothermal project funding. One such grant is the "payments in lieu of tax credits for specified energy property." This is available only for businesses and amounts range from 10 per cent to 30 per cent of project cost. A total of £303 million was made available for geothermal and solar projects that range from research to demonstration projects. Ball State University in Muncie, Indiana was awarded £3 million of these funds for constructing geothermal ground source heat pumps on its campus.

State Grants

California's Energy Commission has the Geothermal Resources Development Account, which offers awards annually. The commission's website states funding is available for research and development as well as "projects that provide significant environmental enhancement." Funds have been given to schools for constructing geothermal projects and to owners of operating plants for help with research and monitoring.

Oregon has a state grant available for persons involved in most sectors, including funds for residential construction. According to, assistance is provided for projects which will produce 20 megawatts or less of power and the amount of assistance is based on the "project's costs in comparison to the market value of the energy produced."

State grants, like federal grants, are often subject to change and have narrow application deadlines. Keeping up with these changes requires checking the associated government websites and contacting the agencies to ensure you are familiar with all aspects of these programs.

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