Assemblymember Rivera and Sen. Kennedy Announce Passage of Geothermal Tax Credit Bill

The bill (A07493/S3864) will offer New Yorkers incentives to heat their homes using carbon-free, geothermal heat pump systems

BUFFALO – Assemblymember Jon D. Rivera and State Sen. Tim Kennedy joined the homeowners of 601 West Ferry St. to announce the passage of Bill A07493/S3864, which grants a tax credit for the purchase and installation of geothermal heat pump systems that will make the most efficient, carbon-free form of home heating more affordable for New Yorkers.

The passage of the bill within the 2022-23 New York state budget arrives at a critical juncture in the state’s climb toward its ambitious climate goals. New York residential customers are now eligible for a 25% tax credit, up to $5,000, on the installation of geothermal systems, as Gov. Hochul continues the state’s commitment toward 2 million electrified and energy efficient homes statewide by 2030.

Geothermal heating and cooling are a critical tool for New York’s homeowners to reduce their carbon footprint. These systems leverage stable ground temperatures to boost their heating and cooling efficiencies instead of burning fossil fuels in the home. Added benefits include reducing the electricity needed on the hottest and coldest days when demand on the grid, along with the cost to consumers, is highest.

Across the globe, more countries are continuously implementing geothermal heat pumps into residential neighborhoods. Norway, Finland and Sweden, among others, have been relying more and more on the benefits of heat pumps to heat their homes. Europe sold 1.62 million heat pumps last year, raising their estimated installed number to 14.86 million units.

New York emits more building pollution than any other state. Vulnerable communities and residents of low-income housing are more likely to be exposed to higher emissions and health-damaging pollution. Geothermal heat pumps offer an environmentally friendly and financially viable solution.

Utility spending in the gas distribution system has tripled in the last eight years, using hundreds of millions of dollars from ratepayers to finance costly new gas lines. Meanwhile, electric buildings are becoming more ubiquitous, with more than 75 fossil-free buildings in NYC alone.

Financial aid is available to New Yorkers interested in making the switch, including NYSERDA’s list of local, state and national incentives. Such packages, along with the passage of Bill A08147 in this year’s budget, will allow the state to take much-needed steps toward its urgently needed green energy priorities.

Assemblymember Jon D. Rivera said, “We’ve taken some great strides within New York State when it comes to meeting our ambitious climate goals over the next decade, but more is required if we’re to stave off the worst effects currently projected of a heating planet. Heating buildings is a problem that is responsible for the largest share of greenhouse gas emissions in New York state. We will not meet our climate goals unless we transition away from heating with fossil fuels, and it makes sense to start with new construction where including electrification in the design, construction and financing of the building is most affordable.”

State Sen. Tim Kennedy said, “As New York continues to build on the progressive environmental and climate goals we’ve outlined, we must continue to identify accessible and affordable ways for New Yorkers to effectively reduce their carbon footprint. By incentivizing the use of geothermal heat pump systems statewide, New York is actively taking yet another step towards fostering a sustainable future focused on natural, renewable energy. I was proud to advance this legislation in this year’s budget alongside Assemblymember Jon Rivera and the advocates who fought tirelessly for this policy because they understand the direct impact it will have on homeowners and our greater good as a state.”

Bill Nowak, Executive Director for the New York Geothermal Energy Organization (NY-GEO) said, “Assemblymember Rivera and Senator Kennedy have provided exactly the right tool in the state budget for homeowners who are worried about volatile and unaffordable home heating bills. Geothermal heat pumps will predominate as the heating system of choice in Western New York as the state moves away from gas and oil for heating, in order to meet our crucial climate goals. The $5,000 Rivera/Kennedy tax credit, coupled with other incentives, will come in handy as homeowners make the switch. The low operating cost of these long-lasting systems, which access free heat stored in the ground, will result in the lowest monthly energy bills for decades to come.”

Reed Braman, Director of Energy Development for Erie County said, “The ground is a massive reserve of potential energy and geothermal heat pump systems are a critical tool for providing fossil-free heating and cooling. I want to thank Assemblyman Jonathan Rivera, Senator Timothy Kennedy and other legislators who support environmental leadership at the state level. By providing tax credits for geothermal systems, Erie County businesses and residents can access clean, comfortable, carbon-free heating and cooling more easily.”

Lynda Schneekloth, Sierra Club Niagara Group, Western New York Environmental Alliance and homeowner at 601 West Ferry St., said, “We had been very concerned about the climate crisis for some time and in 2013 asked ourselves, ‘What can individual homeowners do?’ We decided to eliminate gas and install a geothermal system. We have been delighted with the quality of the heating and cooling, and are grateful for the new tax credit that makes the geothermal option for homes more accessible.”

Johannes Rosemann of Buffalo Geothermal Heating said, “Geothermal Technology is the most economical way to heat and cool every building in New York. Furthermore, it is the only technology that achieves zero onsite combustion without creating a peak demand problem for the electrical grid, saving New Yorkers billions of dollars on otherwise needed investments. We thank Senator Kennedy and Assemblymember Rivera for seeing the potential in the technology and making it more accessible with the $5,000 tax credit.”