Energy Tax Reform Discussion Draft
Comments submitted by National Ground Water Association (NGWA)
To the U.S. Senate Finance Committee
January 24, 2014
The National Ground Water Association submits the following comments focusing on the Clean Energy
Tax Credit provisions of the Energy Tax Reform Discussion Draft.
General Comments: Thermal energy and thermal energy storage should be recognized within the bill as
eligible technology for clean energy tax credits. The bill’s current focus on electricity generation departs
from a technology neutral approach and limits the tools available to promote domestic energy and meet
greenhouse gas reduction goals.
For example, geothermal heat pump systems (GHPs) are a clean, renewable thermal energy technology.
A GHP is a distributed technology that can capture and move renewable thermal energy to provide
heating and cooling. GHPs are used in residential, commercial, educational, and government settings
throughout the United States. They have been used alone and as an integral part of net zero energy
installations.
Buildings are the largest single sector of total U.S. energy consumption, accounting for 41% of primary
energy use in 2010. GHPs can efficiently and significantly reduce the heating and cooling loads of
buildings, with positive benefits for the environment and economy.
Existing GHP tax credits are helping the nation with consumer cost savings, good jobs, more efficient
energy use, enhanced electric utility operations, improved air quality and a better environment for all
Americans. And more GHPs mean more benefits accrued to building owners and the nation with the
renewable energy they capture.
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EPA says that GHPs can reduce energy consumption—and corresponding emissions—up to 44%
compared to conventional air-source heat pumps, and up to 72% compared to electric resistance
heating with conventional air-conditioning equipment.
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GHPs have unsurpassed thermal efficiencies. They move 3 to 5 times more thermal energy than
they consume.
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According to DOE, GHPs can reduce residential and commercial heating and cooling bills by 40
to 70 percent.
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GHPs are “Made in the USA,” with thousands of U.S. employees involved in manufacturing,
distribution, installation, and sales.
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GHPs can be used effectively almost anywhere in the United States and are available 24/7 drawing
on the thermal energy resources under our feet.
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Specific Comments and Requests:
The GHP tax credits were first adopted by Congress in 2008 and are set to expire on December 31, 2016.
The current tax credits include the following specific provisions:
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IRS Code section 25D allows individuals to claim a tax credit equal to 30% of qualified
expenditures incurred for installation of an Energy Star-rated GHP at their residence.
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IRS Code section 48(a) allows a tax credit equal to 10% of qualified expenditures of GHP systems
for commercial buildings, plus provisions for scheduled 5-year bonus depreciation of GHP
installations.
It will take time for the GHP industry to overcome short–term economic factors, and to increase its
market share to the point where it will no longer need tax credit support. For these reasons, the GHP
industry asks Congress to retain and extend IRS Code sections 25D and 48(a) until the end of 2020.
We also request that the draft energy tax reform bill language be modified to incorporate thermal energy
technology, such as GHPs, and broaden the scope of clean electricity tax credits to clean energy tax
credits that specifically recognize thermal energy and storage.
About:
The National Ground Water Association is a not-for-profit professional society and trade association for
the groundwater industry. Our members from all 50 states include some of the country’s leading public
and private sector groundwater scientists, engineers, water well contractors, manufacturers, and suppliers
of groundwater-related products and services. The Association’s vision is to be the leading groundwater
association that advocates the responsible development, management, and use of water.
Contact:
Laine Glisson Oliver, Baker & Donelson, PC
National Ground Water Association Washington Representative
Phone: 202-508-3400
lglisson@bakerdonelson.com
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