The loophole that could give clean heat a boost under Trump

The One Big Beautiful Bill Act (OBBBA) eliminated tax credits for homeowners installing heat pumps or making other energy-efficiency improvements. However, it preserved incentives for commercially leased geothermal and thermal storage systems, offering an alternative route for clean home heating.

President Donald Trump’s new law restricts direct tax credits to individuals but still allows companies that own geothermal heat pumps and thermal energy storage systems to receive tax credits. These companies can lease the systems to customers at prices reflecting federal discounts ranging from 30% to 50%.

Some companies have quickly adapted to this change. Installers without previous leasing operations are shifting their business models, while those already working with multifamily buildings and commercial partners find the transition easier.

The law is "a rare and under-the-radar bright spot for home electrification in the One Big Beautiful Bill Act (OBBBA)."

Despite the overall impact of the law to slow the transition from fossil-fueled buildings to heat pumps—which enhance air quality and reduce carbon emissions—the leasing pathway could help mitigate some negative effects.

“The pathway available to companies that lease geothermal and other clean-heat systems could help soften the blow.”

Leasing allows companies to capitalize on federal incentives while still making clean heating accessible to consumers, supporting the broader goal of home electrification.

Summary: While the OBBBA removes homeowner tax credits for heat pumps, it preserves incentives for companies leasing geothermal and thermal storage systems, creating a promising alternative to support clean home heating.

Canary Media — 2025-11-04

The loophole that could give clean heat a boost under Trump

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