Going geothermal? You could soon score a rebate

More Minnesotans are going underground — to warm and cool their homes and businesses.

About 30 feet beneath your feet, the Earth’s crust has a relatively consistent temperature. So more people are installing geothermal heat pumps that can bring heat up from the Earth in winter or send hot air down into it in summer, heating water, as well.

There’s a federal tax credit available for purchases of such systems that currently covers 26% of a system’s cost. A state rebate program could save consumers even more.

Such is the focus of HF4689, which would establish a geothermal heat exchange system rebate program that could send as much as $6,000 to homeowners or up to $50,000 to owners of multifamily housing or commercial buildings.

On Tuesday, the House Climate and Energy Finance and Policy Committee laid the bill over for possible inclusion in a larger climate and energy bill.

“It gives the ability to get some people over the hump,” said Rep. Amanda Hemmingsen-Jaeger (DFL-Woodbury), the bill sponsor. “They want to invest in geothermal. They might not have enough capital to quite get it done.”

Geothermal energy is a hot topic in the conversation about getting Minnesota to its goal of using exclusively carbon-free electricity by 2040. It’s also known for operating at lower costs than traditional heating, ventilation and air conditioning systems.

Included in the bill are prevailing wage requirements for those installing such a system. An appropriation for the program has yet to be determined.

Representing the Geothermal Exchange Organization, Charles Sutton said most installation projects run between $22,000 and $45,000 for a single-family home before taking into account the federal tax credit.

Rep. Marion Rarick (R-Maple Lake) described that as “an incredibly expensive endeavor,” and Rep. Spencer Igo (R-Wabana Township) expressed concern the program would thus mostly serve high-income residents.

“I want to see that all Minnesotans will have the chance to go for this,” Igo said. “And that it doesn’t just turn into the top 5% of our state getting a handout.”

“I agree,” Hemmingsen-Jaeger replied, saying that she sees the program as being particularly beneficial for multifamily housing. “We could probably be more effective and efficient if we think on a network scale.”