I haven't been on this site for quite some time so I apologize if this has been asked.  I searched the database but could not find the answer.
 
I was contacted by a homeowner that I had quoted a closed loop geothermal system for a couple of years ago.  He is still interested but also needs a new water well.  The question he asked is this.  Is a water well eligible for the Federal Tax Credit if used for geothermal?  My response was the unit itself, a 2 stage FHP with a variable speed fan is, but I am unsure if the water well would also be.
 
Has anyone been faced with this question and what are the Federal guidelines concerning this?  Does it make a difference if the water well is used for domestic and for the geothermal, or would it need to be used for geothermal only to qualify for the credit? 

We have already discussed the need for volume, water quality, increased maintenance on the coil, drainage, etc.

Any help would be appreciated.

Thank you

NOt a tax guy here, but the tax form calls it "geothermal heat pump property" and refers to the Energy Star


f5695

"Qualified geothermal heat pump property costs. Qualified geothermal heat pump property costs are costs for qualified geothermal heat pump property installed on or in connection with your home located in the United States. Qualified geothermal heat pump property is any equipment that uses the ground or ground water as a thermal energy source to heat your home or as a thermal energy sink to cool your home. To qualifiy for the credit, the geothermal heat pump property must meet the requirements of the Energy Star program that are in effect at the time of purchase. The home does not have to be your main home."

Energy Start program requirements 3.0 now read:
"A. Geothermal Heat Pump: A geothermal heat pump uses the thermal energy of the ground or groundwater to provide residential space conditioning and/or domestic water heating. A geothermal heat pump model normally consists of one or more factory-made assemblies that include indoor conditioning and/or domestic water heat exchanger(s), compressors, and a ground-side heat exchanger. A geothermal heat pump model may provide space heating, space cooling, domestic water heating, or a combination of these functions and may also include the functions of liquid circulation, thermal storage, air circulation, air cleaning, dehumidifying or humidifying. A geothermal heat pump system generally consists of one or more geothermal heat pump models, the ground heat exchanger(s), the air and/or hydronic space conditioning distribution system(s), temperature controls, and thermal storage tanks."

F. Open Loop: A ground heat exchange method in which the heat transfer fluid is part of a larger environment. The most common open loop systems use ground water, reclaimed water, or surface water as the heat transfer medium. Also called a ground-water system.



It defines the ground heat exchanger as part of the geothermal heat pump, and specifically mentions the open loop as such. The geothermal system is then defined to include the ground heat exchanger as part of the geothermal system. So my interpretation is that the well is part of the geosystem, no matter if he uses it to also get his domestic water from it.

It is done here all the time. Both the supply well and the return well are part of the geo system irregardless of the fact that the supply well may also provide domestic usage and law irrigation and pool maintanance.
Eric

Thanks for the responses, I will do a little more checking and see if we can install another geothermal system

My guess would be yes, it would qualify. Since it's required for the geothermal system, it would be considered part of the system, as much as duct work modifications would be.  If the homeowner had an existing well, it wouldn't qualify.