October 9, 2008
Oklahoma City-Based LSB Industries Sees Benefits From Federal Geothermal Heat Pump Incentives
By David Page
The Economic Stability Act of 2008 passed by Congress and signed by President Bush last week includes tax credits for purchasing geothermal heat pumps.ClimateMaster, a subsidiary of Oklahoma City-based LSB Industries, is a major geothermal heat pump manufacturer.
Tax credits included in House Resolution 1424 - or the financial industry bailout package - are expected to encourage the purchase of residential and nonresidential geothermal heat pumps.
"We believe that the tax incentives contained in HR 1424 should provide a basis for vital investment in the geothermal heat pump industry infrastructure," said Jack Golsen, LSB chairman and CEO.
Groups lobbying Congress in support of the tax incentives included the Air Conditioning Contractors of America.
ACCA-supported tax credits in HR 1424 included a $2,000 tax credit for homeowners installing geothermal heat pumps until 2016. Federal tax credits for nonresidential systems equal up to 10 percent of the total geothermal system costs.
Both the residential and nonresidential geothermal tax systems are exempt from the Alternative Minimum Tax. In addition to the tax savings, the geothermal systems are an energy-efficient way to heat and cool homes and businesses, according to LSB.
"GHPs utilize the virtually unlimited supply of solar energy stored in the Earth, produce energy savings of up to 60 percent over other systems and at the same time, reduce greenhouse gas emissions," Golsen said.
"We believe that this is particularly important because homes and buildings use 40 percent of all energy in the United States and the greatest part of that energy is for heating and cooling. Due to high energy costs and the national focus on green renewable energy solutions, GHP sales have been strong."
In addition to geothermal heat pumps, LSB's commercial and residential air conditioning and heating products include water- source heat pumps, fan coils and large custom air handlers. The air conditioning and heating products are manufactured at plants in Oklahoma City.
LSB could also benefit from other ACCA-backed tax incentives in the legislation approved by Congress. The legislation also included an extension of a $500 homeowner's energy tax credit for the installation of high-efficiency furnaces, central air conditioners, heat pumps and hot water heaters.
Other incentives in the legislation included an extension of the Commercial Building Tax Deduction until 2013, allowing building owners to deduct up to $1.80 per square foot for improvements in overall performance and a one-year extension, until Dec. 31, 2009, of the $2,000 homebuilders tax credit for the installation of high- efficiency appliances, including heating and air conditioning units, in new homes, according to ACCA.
Originally published by David Page.
(c) 2008 Journal Record - Oklahoma City. Provided by ProQuest LLC. All rights Reserved.