US Geothermal Tax Credits in 2026: What Is Actually Still Alive After OBBBA For an industry that spent more than a decade building financial models around a stable federal incentive structure, 2026 has been a year of whiplash. The 30% federal geothermal tax credit that developers and homeowners built forecasts around is gone in one form and still alive in another, and even the IRS’s own public guidance has been confusing enough to trigger uncertainty across the market. That confusion is not a minor clerical issue. It is shaping investment decisions, contractor sales pitches, homeowner timelines, and project finance assumptions right now. If you work in geothermal, the key question is no longer whether federal incentives exist, but which incentive applies, to which project type, and under what ownership structure. The law that changed the timeline To understand where things stand in 2026, you have to start with the Inflation Reduction Act of 2022, which created a long runway for clean e...
Sunset and Sunrise in Geothermal Plants : Photo Credit Ormat Technologies Inc Geothermal energy is a form of renewable energy that is generated by harnessing the heat from the Earth's core. The heat is generated by the decay of radioactive elements in the Earth's crust and is conveyed to the surface through hot water and steam reservoirs. The Sun plays a role in the generation of geothermal energy because it is responsible for the Earth's internal heat. The Sun's energy heats the Earth's surface, which causes water to evaporate and become part of the hydrologic cycle. The water then seeps into the Earth's crust, where it is heated by the Earth's internal heat, and then rises back to the surface as hot water and steam. This process is known as geothermal convection. Additionally, The Sun also plays a role in the potential of the Ea...