Skip to main content

US Geothermal Gets Similar Tax Incentives as Wind & Solar

Geothermal Energy in the US: A Clean Energy Powerhouse with Tax Incentive Parity

By: Robert Buluma

The global shift toward renewable energy is rapidly evolving, with geothermal energy finally stepping into the spotlight as a clean, reliable, and sustainable power source. In the United States, a significant leap was taken to elevate geothermal's prominence alongside other renewable energy sources, such as wind and solar, through expanded tax incentives under the Inflation Reduction Act of 2022 (IRA).  

This tax incentives will help companies like Eavor to go beyond what they unleashed in the previous year.

This move marks a pivotal moment for geothermal energy, aligning it with the same 30% tax credit offered to wind and solar projects. The newfound parity demonstrates the Biden administration's commitment to an inclusive approach to tackling climate change. Geothermal, with its ability to provide consistent, baseload energy, offers unique advantages that complement intermittent renewables like wind and solar.  

Tax Incentives Driving Geothermal Growth

Under the IRA, geothermal energy projects are now eligible for a Production Tax Credit (PTC) or an Investment Tax Credit (ITC), both of which provide substantial financial benefits to developers. The PTC rewards geothermal plants based on the amount of energy they produce, while the ITC covers 30% of eligible project costs, including exploration and drilling expenses.  

These tax incentives are a game-changer for the geothermal sector, addressing one of the industry's biggest hurdles—high upfront costs. Exploration and drilling for geothermal resources are capital-intensive, often deterring potential investors. By reducing these costs, the IRA creates a favorable landscape for geothermal innovation and deployment.  

Geothermal's Role in a Carbon-Free Future

Geothermal energy is a critical piece of the puzzle for achieving the United States' clean energy goals. Unlike wind and solar, geothermal energy provides a constant power supply, making it an ideal complement to intermittent renewables. As the US grid becomes increasingly reliant on renewable energy, geothermal's reliability will play a vital role in maintaining energy stability and security.  

Furthermore, geothermal energy aligns with the broader goal of decarbonizing the economy. Its potential for direct use applications, such as heating and cooling, expands its versatility beyond electricity generation. This dual role strengthens geothermal's position as a key player in the fight against climate change.  

A Broader Context: Global Tax Incentives for Geothermal

While the US has taken strides to support geothermal, other countries are following suit. For instance,Kenya has historically offered VAT and import duty exemptions on geothermal equipment, further solidifying its position as a global geothermal leader. The Kenyan government is also exploring concessional funding for pre-investment resource assessments, reinforcing its commitment to this renewable energy source.  

Kenya is still reaping big from Geothermal and when the honey is sweet its easier to ammend some rules.

These international developments highlight the growing recognition of geothermal energy's potential. However, the US has taken the lead in integrating geothermal energy into mainstream clean energy policies, making it a model for other nations.  

Challenges and Opportunities 

Despite the promising tax incentives, challenges remain. Geothermal projects require extensive exploration and drilling, with uncertain outcomes. The high upfront capital costs still pose risks for investors, even with tax credits in place.  

However, these challenges create opportunities for innovation. Enhanced geothermal systems (EGS), a cutting-edge technology, aim to unlock geothermal resources in areas without naturally occurring hydrothermal systems. With the financial backing provided by the IRA, the US is well-positioned to lead the development and deployment of such technologies. 

 The Time for Geothermal is Now

The Biden administration's decision to extend tax incentives to geothermal energy signals a recognition of its untapped potential. By putting geothermal on equal footing with wind and solar, the US is paving the way for a more diversified and resilient clean energy portfolio.  

As the geothermal sector gains momentum, this moment marks the beginning of a new era—one where geothermal energy plays a central role in achieving a carbon-free future. The time for geothermal is now, and the US is ready to lead the charge.

Sources:Terra Rodgers , International Energy Agency , Reuters

Connect With Us: LinkedIn , X

Comments

Popular posts

Meta and XGS Energy Partner on 150 MW Geothermal Power Project in New Mexico

Meta and XGS Energy Partner on 150 MW Geothermal Power Project in New Mexico A Game-Changer for AI, Clean Energy, and the Future By Robert Buluma – Alphaxioms Energy Blog In a bold move that signals the future of energy and technology convergence, XGS Energy and Meta Platforms, Inc. have announced a groundbreaking agreement to develop 150 megawatts (MW) of next-generation geothermal energy in New Mexico. This partnership not only promises to reshape the state's energy landscape but also underscores the growing demand for sustainable, round-the-clock power to fuel the age of artificial intelligence (AI) and data-driven economies. Clean Power Without Water – XGS’s Unique Edge At the heart of this partnership lies XGS Energy’s proprietary solid-state geothermal technology. Unlike traditional geothermal systems that rely heavily on water and specific geological conditions, XGS’s innovation enables electricity production from hot, dry rock  with zero operating water use. This water-inde...

EAPOSYS and Halliburton Unite to Supercharge the Future of Advanced Geothermal Systems

EAPOSYS  Partners with  Halliburton to Accelerate the Deployment of Advanced Geothermal Systems By:  Robert Buluma Biel/Bienne, Switzerland – October 10th, 2025  The race toward a sustainable energy future just got hotter. EAPOSYS SA, a Swiss geothermal innovation company, has joined forces with Halliburton (NYSE: HAL) to fast-track the deployment of its groundbreaking Advanced Geothermal Systems (AGS) . Under the newly signed agreement, Halliburton will conduct a subsurface feasibility study to evaluate and optimize the scalability of EAPOSYS’s patented closed-loop geothermal architecture. This collaboration will refine well designs, assess stratigraphic conditions, and minimize drilling risks  paving the way for the industrial-scale rollout of clean, predictable geothermal energy . “EAPOSYS SA has developed an innovative, patented, closed-loop architecture to deploy AGS anywhere in the world,” said Naomi Vouillamoz , CEO and co-founder of EAPOSYS. “AGS ...

Driving the UK Toward Net Zero: Chris Sladen on Geothermal’s Untapped Potential

Alphaxioms, we talked to Chris Sladen about his involvement in geothermal both in the UK, and globally By:  Robert Buluma Chris, please begin by explaining a little about yourself, and why you have a passion for geothermal? I have spent over 45 years involved in energy. Following undergraduate studies in geology at Southampton University, and a PhD in sedimentology at Reading University, I joined the energy sector in Aberdeen in 1980. It was a fascinating era when it seemed like at least one giant oil & gas field was discovered offshore every month; the wealth creation for the UK was gigantic. I got to see so much geology and rocks - my true passion. I moved to China in late 1983; not today’s China, this was over 40 years ago, a country closed for decades and embarking on an open-door policy, in part to bring both investment and technology. I became very interested in energy trends, energy politics, and new geography created by changing politics leading to opportunities for ene...

Košice Ignites Its Geothermal Future: A 30-Year Dream Becomes Reality”

Košice Turns Up the Heat: Geothermal Energy to Warm the City After 30 Years in Waiting By: Robert Buluma After three decades of anticipation, the city of Košice, Slovakia, is finally set to tap into one of the Earth’s cleanest and most sustainable energy sources geothermal heat. On Wednesday, drilling begins on the long-awaited project “Utilization of Geothermal Energy in the Košice Basin”, marking a major leap toward energy independence and carbon neutrality for Slovakia’s eastern metropolis. From the site of Svinica–Ďurkov, a new deep geothermal well will be drilled, expected to reach a temperature of 135°C and a flow rate of 55 liters per second. Two reinjection wells each plunging roughly 3,700 meters deep  will accompany the main production well, ensuring a closed-loop system that reuses and reheats the geothermal water beneath the Earth’s surface. The third and final well is expected to be completed by mid-2026. Turning Vision into Reality The geothermal heating project is be...

INTERVIEW, Geretsried and Beyond: Eavor’s Blueprint for Reliable, Sustainable Energy

Robert Buluma :  Alphaxioms Responses were provided by Jeanine Vany, Executive Vice-President of Corporate Affairs, Eavor . Can you explain the key technological advancements in the latest iteration of the Eavor-Loop™ system? We have made a number of technological advancements at our project in Geretsried Germany . This includes innovation and learning resulting in dramatic improvements in our drilling performance and we’re proud to talk about our technology. For example, Eavor recently announced successful implementation of our in-house AMR (active magnetic ranging) tool which makes drilling more accurate and efficient. Eavor-Link™ AMR uses magnetic ranging while drilling to maintain constant alignment as it drills two wells at approximately 100 metres apart before they are intersected to create a continuous geothermal loop, which is then sealed with Eavor’s proprietary Rock-Pipe™ formula. With real-time data transmission between downhole sensors, the technology ensures tighter bo...

Powering the Future: How Geothermal Energy is Revolutionizing the Oil Industry Globally

Harnessing Geothermal Energy Alongside Oil: A Global Case Study   By:  Robert Buluma Geothermal energy, the heat derived from the Earth’s core, has long been recognized as a sustainable and reliable energy source. However, its integration with the oil and gas industry is a relatively new and exciting development. This case study explores how geothermal energy is being harnessed alongside oil globally, highlighting innovative projects, technological breakthroughs, and the synergies between these two industries.   The Synergy Between Geothermal and Oil Industries This Geothermal Decade saw a rise in Oil and Gas companies vouching for Geothermal Energy The oil and gas industry brings decades of expertise in subsurface exploration, drilling, and reservoir management—skills that are directly transferable to geothermal energy development. Both industries rely on similar technologies, such as directional drilling, hydraulic fracturing, and high-temperature equipment, m...

"Zanskar's Lightning Dock Triumph: Redefining Geothermal Energy Potential"

Zanskar's Lightning Dock: A Game-Changer for Geothermal Energy By: Robert Buluma In a bold move that underscores their unwavering commitment to geothermal energy innovation, Zanskar has made headlines with a groundbreaking development at the Lightning Dock geothermal power plant. Betting on an underperforming resource, the company has not only turned the site around but delivered a world-beating gusher that validates their ambitious vision.   The Rise of Lightning Dock Zanskar's strategy has always been clear: harness modern data collection techniques and advanced statistical tools to unlock geothermal sites previously overlooked by the industry. Their efforts over the past three years have led to the discovery of numerous potential hotspots, proving that geothermal has far more untapped potential than previously believed.   Together with XGS energy, Zanskar is well poised to redefine the geothermal energy drilling sector with proven breakthroughs and a financial mus...

Innargi and H. Anger’s Söhne Forge Long-Term Partnership to Power Geothermal Growth in Denmark and Germany

INNARGI  and  H. Anger’s Söhne Seal a Groundbreaking Geothermal Drilling Deal for Denmark and Germany By:  Robert Buluma In a major stride toward Europe’s clean energy ambitions, Innargi A/S, a leading Danish geothermal developer, has entered into a three-year framework agreement with H. Anger’s Söhne Bohr- und Brunnenbaugesellschaft mbH, one of the continent’s most experienced drilling companies. The deal covers the provision of drilling rig services for geothermal projects across Denmark and Germany, marking a significant advancement in the region’s pursuit of sustainable, low-carbon district heating. Under the agreement, approximately 20 deep geothermal wells will be drilled over the next three years, each designed to supply renewable and stable heat to communities. These wells will utilize the City Rig 500, one of Europe’s quietest and most technologically advanced rigs — developed jointly by Anger and Herrenknecht Vertical. The City Rig 500’s design is tailored spec...

Mastering the Subsurface: Insights from a Geothermal Reservoir Engineer

Geothermal energy is often called the “quiet backbone” of the clean energy transition. To understand the science, challenges, and innovations driving this sector, we spoke with a seasoned geothermal reservoir engineer with experience spanning the Andes, Nevada, Utah, and volcanic fields worldwide. Here’s what they shared. By:  Robert Buluma 1. What sparked your passion for geothermal reservoir engineering, and did you ever imagine yourself working in some of the world’s most challenging geothermal fields? My passion was sparked during my early career in the petroleum industry, specifically in reservoirs. I was fascinated by the subsurface—how fluids move, how heat and pressure interact but it wasn’t until I worked on projects in Peru that I realized geothermal offered the chance to apply my skills to clean energy. I never imagined I would later work on Enhanced Geothermal Systems (EGS) projects in Nevada and Utah or Andean volcanic fields, where the geology is as unforgiving as it ...

Mercury, Contact Lead NZ's Supercritical Geothermal Energy Revolution

🌋 From the Ground Up: New Zealand’s Bold Leap into a Supercharged Geothermal Future By:  Robert Buluma In the heart of New Zealand, beneath the rugged volcanic landscapes and steaming geysers, lies an energy revolution waiting to erupt. On July 30th, 2025, a powerful message echoed from the geothermal capital of the Southern Hemisphere — New Zealand is not just embracing its geothermal potential; it is preparing to unleash it. With the unveiling of the draft strategy titled From the Ground Up , the government, led by Minister Shane Jones for Resources and Regional Development, signaled a transformative shift in how the nation will harness the heat beneath its feet — and it's as ambitious as it is inspiring. 🔥 A Legacy Forged in Steam New Zealand’s geothermal story is deeply rooted in its identity. Long before turbines spun and power grids buzzed, Māori ancestors were using geothermal waters for warmth, healing, and cooking. Geothermal, or waiwhatu , is more than a resource — ...