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...
Unlocking the Earth's Heat: The Promise of Geothermal Energy in the UK's Humber Region
By: Robert Buluma
Geothermal energy, harnessed from the natural heat stored beneath the Earth's surface, represents one of the most reliable and sustainable renewable resources available today. Unlike solar or wind power, which depend on weather conditions, geothermal provides a constant, baseload energy supply that operates 24/7. This makes it particularly valuable for industrial applications, where consistent heat and power are essential. In the context of global efforts to combat climate change, geothermal energy stands out for its ability to significantly reduce carbon emissions without the intermittency issues plaguing other renewables.
At its core, geothermal energy involves tapping into hot water or steam reservoirs deep underground. These resources can be used directly for heating or to generate electricity through turbines. Geothermal systems can cut CO2 emissions by up to 90% compared to fossil fuel-based alternatives, while also minimizing air pollutants like nitrogen oxides and sulfur dioxide. For industries, this translates to lower operational costs over time, enhanced energy security, and compliance with stringent net zero targets. In regions with favorable geology, such as sedimentary basins rich in permeable rocks, geothermal can deliver clean heat for processes like manufacturing, chemical production, and food processing, which traditionally rely on gas or coal.
The benefits extend beyond emissions reduction. Geothermal projects often integrate with other technologies, such as energy storage or hydrogen production, creating hybrid systems that amplify decarbonization efforts. Moreover, they promote local economic growth by creating jobs in drilling, engineering, and maintenance. Geothermal can serve as a multi-technology solution, providing not just power but also valuable byproducts like minerals extracted from brines, further enhancing its economic viability. As the world races toward net zero by 2050, geothermal’s role in addressing the climate crisis is increasingly recognized, with potential to supply a substantial portion of clean energy needs.
In the United Kingdom, where energy security and industrial decarbonization are national priorities, geothermal energy is gaining traction despite the country’s non-volcanic geology. The UK lacks the high-temperature resources found in places like Iceland or New Zealand, but it boasts significant low-to-medium enthalpy potential in deep aquifers. Central and southern Britain could yield between 106 and 222 gigawatts (GW) of thermal heat from rocks at depth. Key areas include the East Midlands, Greater Manchester, Cheshire, and notably, the Humber region, which emerges as a hotspot due to its sedimentary basins and proximity to major industrial clusters.
The Humber region, encompassing Hull, Grimsby, and surrounding areas, is the UK’s largest industrial CO2 emitter, accounting for emissions 30% higher than the next largest cluster. Home to refineries, chemical plants, and power stations, it presents both a challenge and an opportunity for decarbonization. The region’s geology, featuring permeable formations like the Sherwood Sandstone and Carboniferous limestone, allows for the extraction of warm waters heated by natural geothermal gradients. These waters, often at temperatures of 60–75°C at 2 km depth, can be used for district heating or industrial processes, reducing reliance on imported gas and bolstering energy independence.
Recent research identifies the Humber as part of one of eight “Goldilocks zones” in the UK—areas with optimal geological conditions for multiple net zero technologies, including geothermal, carbon capture and storage (CCS), and energy storage. These zones could drive £40 billion in annual investments, creating jobs and fostering economic growth. The Humber’s strategic location near the North Sea also supports synergies with offshore wind and CCS pipelines, making it a prime candidate for integrated clean energy hubs.
A flagship initiative exemplifying this potential is the Humber Geothermal Energy (HuGE) project. Launched in partnership between the University of Hull, Consortium Drilling Ltd, and Eden Geothermal Limited, HuGE secured funding from the Northern Net Zero Accelerator (NNZA) in early 2025. The NNZA, a £5 million program funded by the Engineering and Physical Sciences Research Council (EPSRC), aims to decarbonize the North East, Teesside, and Humber (NETH) regions through collaborative innovation. HuGE received £180,000 in the program’s first funding round to assess the feasibility of deep geothermal resources in the Humber.
Led by Professor Mark Anderson at the University of Hull, the project builds on prior research that mapped shallow geothermal opportunities and now shifts focus to deeper aquifers. By addressing geological, technical, and commercial aspects, HuGE aims to unlock clean heat for industrial users, potentially transforming the region into a leader in sustainable growth. S Sinclair, CEO of Consortium Drilling, highlighted the project’s significance in a recent announcement, noting it as a “strong step forward for industrial decarbonisation and UK energy security.”
Since its inception, HuGE has progressed amid a broader surge in geothermal interest. By 2026, global investments in next-generation geothermal have quadrupled since 2018, driven by policies and big tech’s demand for reliable clean power. In the UK, similar momentum is evident, with projects like the University of York’s £35 million geothermal scheme to decarbonize its campus and explore city-wide applications. For the Humber, HuGE’s business case could pave the way for full-scale development, integrating with initiatives like Zero Carbon Humber, which received £75 million in government funding for net zero technologies.
Challenges remain, including high upfront drilling costs and the need for supportive policies. However, advancements in enhanced geothermal systems (EGS), which fracture rocks to create reservoirs, could expand viability. In the Humber, where aquifers are naturally permeable, traditional methods may suffice, lowering barriers.
Looking ahead, geothermal could supply up to 20% of the UK’s heat demand by 2050, with the Humber leading the charge. Projects like HuGE not only decarbonize industry but also create resilient supply chains, insulated from global market volatility. As S Sinclair aptly put it, this is about “unlocking new opportunities for clean heat and sustainable industrial growth.”
See also: Switzerland’s Geothermal Pioneer Riehen Seeks CHF 15.2 Million to Double Down on Clean Heat
In summary, the HuGE project embodies the transformative power of geothermal energy in the UK’s energy transition. By leveraging the Humber’s geological advantages, it offers a blueprint for industrial decarbonization, economic revitalization, and a secure, low-carbon future. With continued investment and collaboration, the Earth’s heat could become a cornerstone of Britain’s net zero ambitions.
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