R362-2-11. Investment Tax Credit, Eligible Costs for Commercial Systems and Residential Systems, Geothermal Electricity

  (A) All eligible costs for geothermal electric systems must conform with Section R362-2-5, above. Geothermal electric systems must also meet the requirements in this Section.

  (B) Eligible equipment costs for a geothermal electrical system are limited to components up to the point of interconnection with AC service when powering a building, or up to the point of interconnection with the electrical grid for system intended solely for the sale of power. Eligible equipment costs include production and injection wells and well casings, wellhead pumps, and turbine generators. In addition, flash tanks (flash steam systems), heat exchangers (binary cycle systems), condensers, cooling towers, associated wiring and disconnects, and associated pumps are eligible.

  (C) Design costs for a geothermal electrical system are eligible but only for the cost of integrating the eligible components of the system that are listed in (B) above. Tax credit applications should separate design costs for the geothermal and conventional components of the system.

  (D) Costs for studies to characterize a geothermal resource are eligible so long as a final system using the geothermal resource is build and placed into operation.

  (E) Costs incurred for the drilling of wells are eligible if such wells are actually used (whether for withdrawal or reinjection of water) within the final geothermal electrical system. The cost of exploratory wells that are not used within the final system are not eligible.

  (F) In the case of a system that includes any well greater than 30 feet in depth, any drilling must be performed by a water well driller licensed by the Utah Division of Water Rights. All such wells, whether water is returned to the ground through a recharge well or used or discharged at the surface, require an approved water right certification issued by the Utah state engineer in the Division of Water Rights. Proof of driller qualifications and well right may be required on the tax credit application.

  (G) In order to be eligible for residential or commercial tax credits, a geothermal heat pump system must have been designed by either:

  1. A professional engineer licensed in Utah; or

  2. A person designated as a "Certified Energy Manager" by the Association of Energy Engineers.

  Proof of designer qualification may be required on the tax credit application.

  (H) In order to be eligible for a residential or commercial tax credit, a geothermal electricity system must be certified for safety by either:

  1. A professional electrician licensed by the State of Utah;

  2. A county or municipal building inspector licensed by the State of Utah.

  Proof of this certification may be required with the tax credit application.