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...
Power Beneath the Surface: How Geothermal Lithium Is Rewriting the Energy Future
At the center of this breakthrough stands (GEL), a company redefining what geothermal projects can achieve. Their latest milestone—securing funding under the UK’s ambitious DRIVE35 programme—signals not just a win for one company, but a turning point for the entire clean energy ecosystem.
This is not just a story about energy. It is a story about convergence—where heat, chemistry, engineering, and policy collide to unlock a future that is cleaner, more resilient, and economically strategic.
A New Era Begins at United Downs
Deep in Cornwall, at the United Downs geothermal site, something extraordinary is happening. For decades, geothermal projects were largely confined to electricity generation and district heating. But GEL has taken a bold step beyond tradition.
In February 2026, the company achieved a UK-first: commercial-scale lithium production from geothermal brines.
This is no small feat. The geothermal fluids brought to the surface at United Downs contain over 340 parts per million (ppm) of lithium—one of the highest concentrations ever recorded globally. That figure alone places the project in elite territory, but what truly sets it apart is how the lithium is extracted.
Instead of destructive open-pit mining or environmentally taxing evaporation ponds, GEL uses Direct Lithium Extraction (DLE)—a cutting-edge process that isolates lithium directly from hot geothermal fluids.
The implications are profound.
The Lithium Bottleneck: A Global Challenge
To understand why this matters, you need to grasp the scale of the lithium challenge.
Lithium is the backbone of modern electrification. It powers electric vehicles (EVs), grid-scale batteries, smartphones, and nearly every device that defines contemporary life. Yet, despite its importance, the global lithium supply chain is fragile.
Most lithium today comes from:
- Hard rock mining in Australia
- Brine evaporation in South America’s “Lithium Triangle”
Both methods are resource-intensive, slow, and environmentally contentious. They require vast land areas, consume significant water, and often involve long supply chains that stretch across continents.
As demand for EVs accelerates, this system is under strain.
The world doesn’t just need more lithium—it needs better lithium.
Direct Lithium Extraction: A Game-Changer
This is where DLE enters the picture.
Unlike traditional methods, DLE:
- Extracts lithium directly from geothermal fluids
- Operates in a closed-loop system
- Minimizes water usage and land disruption
- Enables faster production cycles
When combined with geothermal power, the process becomes even more powerful. The same heat that drives electricity generation also brings lithium-rich fluids to the surface, creating a dual-revenue system that enhances project economics.
At United Downs, this synergy is already in motion.
Initial production capacity stands at 100 tonnes per annum, but GEL has far bigger ambitions. Over the next decade, the company aims to scale production to 18,000 tonnes annually—enough to supply lithium for approximately 250,000 electric vehicle batteries each year.
To put that into perspective, that would cover around 65% of the UK’s 2024 Battery Electric Vehicle registrations.
The Strategic Importance of Domestic Supply
Beyond the technical achievement lies a deeper strategic narrative.
The UK, like many nations, is grappling with the need to secure domestic sources of critical minerals. Relying on imports exposes economies to geopolitical risks, supply disruptions, and price volatility.
By developing lithium production at home, GEL is helping to:
- Strengthen national energy security
- Reduce reliance on foreign supply chains
- Support local industries and jobs
- Accelerate the transition to net-zero
This is precisely why the DRIVE35 programme—delivered by in partnership with —has backed the project.
The initiative is designed to transform innovation into industrial capability, ensuring that breakthroughs like GEL’s do not remain confined to laboratories but scale into real-world impact.
A Perfect Alignment of Energy and Industry
What makes this development particularly compelling is how it aligns with the broader transformation of the automotive sector.
Electric vehicles are not just a technological shift—they represent a complete reconfiguration of industrial systems. From battery manufacturing to charging infrastructure, every component must evolve.
Lithium sits at the heart of this transformation.
By integrating lithium production with geothermal energy, GEL is effectively bridging two critical sectors:
- Clean energy generation
- Electric mobility supply chains
This convergence creates a powerful feedback loop:
- Geothermal energy powers lithium extraction
- Lithium enables EV batteries
- EV adoption drives demand for clean electricity
- Clean electricity increases the value of geothermal systems
It is a self-reinforcing cycle—one that could redefine how we think about energy projects.
Environmental Advantages: A Cleaner Path Forward
Traditional lithium extraction has long faced criticism for its environmental footprint. Evaporation ponds, for example, can deplete local water resources and disrupt ecosystems.
Geothermal lithium offers a stark contrast.
At United Downs:
- Fluids are reinjected back into the زمین after extraction
- Surface disruption is minimal
- Carbon emissions are significantly reduced
This makes geothermal lithium one of the most sustainable pathways for meeting global demand.
In an era where ESG (Environmental, Social, and Governance) considerations are becoming central to investment decisions, this advantage cannot be overstated.
Economic Potential: Beyond Energy
The economic implications extend far beyond energy production.
By scaling lithium extraction, GEL is positioning itself as a key player in the global battery supply chain. This opens up opportunities in:
- Battery manufacturing
- Energy storage systems
- Export markets
- Advanced materials research
Moreover, the project demonstrates how geothermal assets can be multi-dimensional, generating value from both heat and minerals.
For investors, this dual-revenue model reduces risk and enhances returns—making geothermal projects more attractive than ever before.
A Model for the World
While United Downs is located in Cornwall, its impact is global.
Countries with geothermal resources—such as Kenya, Iceland, the United States, and Indonesia—could replicate this model. In regions like East Africa, where geothermal energy is already well-established, the potential for lithium extraction remains largely untapped.
Imagine geothermal fields not just powering homes, but also producing critical minerals for global markets.
For a country like Kenya, this could be transformative.
With existing infrastructure in places like Olkaria and Menengai, the integration of DLE technologies could unlock new revenue streams and position the nation as a leader in sustainable mineral production.
Leadership and Vision
At the heart of GEL’s success is leadership that understands both the technical and strategic dimensions of the challenge.
CEO Ryan Law captured this vision succinctly when he described the funding as a step toward “strengthening a reliable, low-carbon domestic supply of lithium.”
This is not just about scaling production—it is about building a system that is resilient, sustainable, and future-proof.
Similarly, Ian Constance of the Advanced Propulsion Centre emphasized the importance of turning innovation into industrial capability—a reminder that breakthroughs only matter if they can be deployed at scale.
Challenges Ahead
Despite the optimism, challenges remain.
Scaling from 100 tonnes to 18,000 tonnes annually is no small task. It will require:
- Advanced engineering
- Significant capital investment
- Regulatory support
- Continued technological innovation
There are also uncertainties around:
- Long-term reservoir performance
- Market dynamics for lithium pricing
- Competition from other extraction technologies
However, these challenges are not insurmountable. If anything, they represent the next frontier of innovation.
The Bigger Picture: Energy Transition Redefined
What GEL is doing at United Downs is part of a broader shift in how we think about the energy transition.
For years, the focus has been on replacing fossil fuels with renewables. But the reality is more complex.
The transition also requires:
- New materials
- New supply chains
- New business models
Geothermal lithium sits at the intersection of all three.
It is not just a cleaner way to produce energy—it is a smarter way to build the entire energy ecosystem.
A Glimpse Into the Future
Imagine a world where every geothermal plant doubles as a mineral extraction facility.
Where energy projects are not just about megawatts, but also about tonnes of critical resources.
Where countries leverage their प्राकृतिक heat not only to power their grids, but to fuel global industries.
This is not science fiction. It is already happening.
And United Downs is just the beginning.
Conclusion: Beneath Our Feet Lies the Future
The story of is a reminder that the most powerful innovations often come from reimagining what already exists.
Geothermal energy has been with us for decades. Lithium extraction has been around even longer. But bringing them together in a way that is efficient, sustainable, and scalable—that is where true innovation lies.
As the world races toward a low-carbon future, solutions like geothermal lithium will play an increasingly critical role. They offer a pathway that is not only cleaner, but also smarter—aligning environmental goals with economic realities.
See also:Menengai III Geothermal Plant Powers Kenya’s Clean Energy Future
For policymakers, investors, and innovators, the message is clear:
The future of energy is not just above ground in solar panels and wind farms.
It is also deep below the surface—waiting to be unlocked.
And if United Downs is any indication, that future is already here.
Source: Gel
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