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...
Kenya’s geothermal sector stands at a pivotal crossroads in 2026, blending rapid expansion, legal scrutiny, fresh exploration, and bold affordability measures.
As Africa’s geothermal leader, Kenya harnesses the Rift Valley’s heat to deliver reliable, clean baseload power that stabilizes the grid amid fluctuating hydro and costly thermal backups. Today, the narrative unfolds across Menengai’s maturing projects, Suswa’s exciting new frontier, courtroom challenges, and policy reforms aimed at cheaper electricity for all.
Menengai: From Vision to Reality with Turbulence
The Menengai field in Nakuru County exemplifies Kenya’s innovative de-risking model. The Geothermal Development Company (GDC) drills high-risk wells and confirms steam resources, then invites private independent power producers (IPPs) to build plants and purchase steam. This approach accelerates investment by removing the biggest uncertainty.
Three 35 MW plants were planned, totaling 105 MW:
- Sosian Energy (Menengai III) — first to connect, supplying power since mid-2023.
- Globeleq (Menengai II) — on track for grid injection by mid-2026.
- OrPower Twenty-Two (Menengai I) — targeting operations by March 2026.
These additions promise greater grid reliability, reduced fossil fuel dependence, and support for rising demand from urbanization, industry, and electrification.
Yet progress faces hurdles. Sosian Energy’s milestone is overshadowed by a significant legal battle. In March 2025, the Environment and Land Court canceled Sosian’s Environmental Impact Assessment (EIA) licence, citing inadequate public participation, insufficient community consultation, and missing comprehensive climate impact assessments. The ruling ordered a fresh, inclusive Environmental and Social Impact Assessment. Though the plant generates power, this decision underscores a critical truth: renewable projects must prioritize environmental justice, transparency, and local voices to remain sustainable and legitimate.
Meanwhile, Globeleq advances steadily. Backed by international expertise, its 35 MW plant nears completion, with grid connection expected mid-2026. This timely boost will deliver stable, low-emission power precisely when Kenya needs it most.
Suswa Awakens: A New Frontier Unlocks 300 MW Potential
Adding fresh momentum, GDC flagged off rig mobilization to the Suswa Geothermal Field on January 29, 2026, at Menengai Camp. Acting MD & CEO Stephen Busieney called it a “defining moment,” as heavy equipment rolled out under Kenyan flags and “Road to Suswa” banners.
Located in the southern Rift Valley across Narok and Kajiado Counties, Suswa sits within the dramatic Mount Suswa volcanic complex — a double-caldera feature with visible fumaroles and hot grounds signaling strong geothermal promise.
Experts estimate up to 300 MW potential. Development will proceed in phases: exploration drilling first, then power plants. Suswa becomes GDC’s third active field, alongside Menengai and Baringo-Silali, supporting national targets of 1,681 MW geothermal capacity by 2030 under the Energy Compact.
Community benefits shine through the Suswa Stima initiative, granting locals 20% stake in steam harnessed for power. International partnerships, including with Indonesia’s Pertamina, promise expertise and funding to accelerate progress.
Affordability Drive: Tax Breaks to Cap Tariffs at Sh9/kWh
Despite expansion, high electricity costs burden households and industries. Geothermal remains Kenya’s cheapest stable renewable, but capital-intensive drilling, imported equipment, and financing inflate tariffs.
The Ministry of Energy’s draft National Geothermal Strategy 2026–2036 proposes targeted incentives:
- Tax exemptions on drilling rigs, machinery, and services.
- Power Purchase Agreements extended to 30+ years.
- Reforms for cost-reflective steam tariffs.
The goal: keep wholesale geothermal prices at or below Sh9 per kWh (about 7 US cents). If approved by Parliament, these measures would lower developer costs, improve project bankability, enable more plants, and pass savings to consumers , fueling industrial growth without straining wallets.
The Road Ahead: Balancing Speed, Fairness, and Affordability
Kenya’s geothermal journey weaves together triumphs and tests. Menengai’s IPPs prove the model works, Suswa’s rig move signals bold scaling, and policy reforms target truly affordable clean energy. Yet the Sosian ruling reminds all stakeholders that green progress demands genuine inclusion, robust environmental safeguards, and accountability.
Success hinges on discipline: fast-tracking viable projects, engaging communities meaningfully, attracting investment through smart incentives, and ensuring benefits reach ordinary Kenyans. With Globeleq energizing the grid mid-2026, OrPower following soon, and Suswa exploration underway, the future glows bright.
Geothermal will not only light homes — it will drive Kenya’s industrial and economic rise, if built on foundations that are equitable, sustainable, and affordable for all.
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