The loophole that could give clean heat a boost under Trump

The Loophole That Could Boost Clean Heat Under President Trump

President Donald Trump’s One Big Beautiful Bill Act (OBBBA) eliminated tax credits for homeowners installing heat pumps or making other energy-efficiency improvements. However, the law preserved tax incentives for commercially leased geothermal heat pumps and thermal energy storage systems, offering a pathway to support cleaner home heating.

How the Law Affects Tax Credits

While individual homeowners can no longer directly benefit from these tax credits, companies that own geothermal or thermal storage systems can still claim them. These companies may then lease the equipment to customers at rates reflecting a 30% to 50% federal discount.

Industry Response

A Bright Spot in Home Electrification

The leasing loophole is a rare, under-the-radar advantage within the OBBBA, which largely slows the transition from fossil fuels to heat pump technology.

The law "is otherwise expected to slow down the shift from fossil-fueled buildings to heat pumps, which improve air quality and can save consumers money on top of reducing carbon emissions."

Still, this pathway for leasing geothermal and clean heat systems may help ease the impact of reduced homeowner incentives.

Author’s Summary

The OBBBA cuts individual tax credits for heat pumps but retains significant commercial leasing incentives for geothermal and thermal storage systems, offering businesses a way to sustain clean heating adoption.

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Canary Media Canary Media — 2025-11-04

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