Skip to main content

Current Federal Policies for Geothermal Electricity Generation

This table can help you identify the federal policies in place that apply to geothermal electricity generation. It is important to explore these when developing geothermal electricity generation policy. States also use a variety of policies to support clean energy development. See current state policies already in place.

Current Policy Description
Auction Regulations Energy Policy Act of 2005. Amended leasing regulations for geothermal resources located on federal lands, opening the resource nomination process to the market.
Grants/Loans/Loan Guarantees Geothermal projects can receive U.S. Department of Energy (DOE) Tribal Energy Program grants and U.S. Department of Agriculture Rural Energy for America Program grants. Federal government has been authorized to provide loan guarantees via DOE for geothermal energy projects under Title XVII of Energy Policy Act of 2005.
Investment Tax Credit/Production Tax Credit Geothermal facilities placed in service 2009 through 2013 are eligible for their choice of either a production tax credit of 2.1 cents per kilowatt hour for 10 years or a 30% investment tax credit on qualifying expenditures on geothermal equipment. After 2013, a 10% investment tax credit policy that currently has no expiration date is available.
Modified Accelerated Cost Recovery System (MACRS) An IRS-implemented incentive that allows for accelerated depreciation on a 5-year tax schedule.
Section 1603 Cash Grant Program Section 1603 of Recovery Act allows taxable entities developing geothermal projects to take the respective production tax credit or investment tax credit as a cash grant.
Public Utility Regulatory Policies Act Implemented in 1978. Requires utilities to purchase electricity from qualifying facilities at avoided costs. Still drives some geothermal development.
Research and Development DOE's Geothermal Technologies Program funds R&D and technical assistance for geothermal exploration and development.
Resource Assessment In 2008, the U.S. Geological Survey (USGS) conducted a study of moderate- and high- temperature geothermal resources in 13 states, as authorized in the Energy Policy Act of 2005. This study focused on the western United States, including Alaska and Hawaii, and identified all known geothermal resource areas and analyzed geologic features that facilitate the formation geothermal systems. It also sought to identify regions that may be viable for enhanced geothermal power development specifically in the western United States. This work demonstrates a large resource and identifies potentially high value areas where geothermal energy production is likely to be viable.
Unitization Allows multiple landowners or federal leaseholders to develop a vast reservoir as one unit rather than limiting individuals to the specific property rights assigned by a lease or deed. Generally allows for the most efficient development of the resource and reduces the required investments in equipment. Procedures outlined in the Energy Policy Act of 2005.