New York State has just doubled the cap on its residential geothermal tax credit from $5,000 to $10,000 for systems placed in service after July 1 2025, making clean, renewable heating and cooling even more accessible for homeowners across the state.
What Is the NYS Geothermal Tax Credit?
New York’s Residential Ground Source Heat Pump Tax Credit provides homeowners with a 25% tax credit on the total cost of their geothermal system for those eligible*. Previously capped at $5,000, the credit now maxes out at $10,000, thanks to new legislation passed in 2025 aimed at accelerating the state’s transition away from fossil fuels.
*ACES Energy is not a tax consultant, review with your personal tax consultant.
Why This Matters
Combined with the 30% federal tax credit, the enhanced New York State tax credit significantly reduces the net cost of a geothermal installation. In many cases, homeowners can now save up to 55% off their system’s total price through incentives alone.
Example of Savings
Let’s say your geothermal system costs $42,000:
- Rebate Incentive (Estimate) = $7,500
- Federal Tax Credit (30%) = $10,350
- NYS Tax Credit (25% of $42,000, capped at $10,000) = $8,625
- Total Incentives = $26,475
- Net Cost After Incentives and Tax Credits = $15,525
That’s 63% of the cost covered, plus long-term energy savings for the life of your system!
Clean Energy from Your Own Backyard
By choosing geothermal, you’re tapping into a renewable energy source right beneath your feet. With no combustion, no on-site emissions, and minimal maintenance, ground source heat pumps provide a clean, efficient alternative to oil, propane, or natural gas heating systems.
This expanded NYS credit helps ensure more homeowners can benefit from truly domestic energy—right from their own backyard.
Ready to Take the Next Step?
If you’ve been waiting for the right moment to install geothermal, this is it. The increased tax credit makes geothermal more affordable than ever, and our team is here to guide you through the process from site evaluation and system design to incentive paperwork and final installation.
Contact us today for a free consultation and see how much you could save with geothermal.
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