Climate Control Group CEO Dan Ellis says the commercial geothermal market isn't slowing down. Inflation Reduction Act tax incentives for commercial geothermal installations remain in place through 2035, and that long runway is pulling the sector into new project types and markets that hadn't previously considered geothermal viable.
Residential geothermal lost its federal tax credit under the recent reconciliation bill, and sales in that segment are expected to slow. But Ellis notes residential geothermal still closed out last year strong, with financing increasingly stepping in to fill the gap left by the eliminated incentive — a pattern consistent with the broader shift toward financing-led HVAC sales across the industry.
The signal for commercial contractors is durability. Unlike many residential electrification incentives that have proven politically fragile and subject to reversal with little notice, the commercial geothermal incentive window is long enough — nearly a decade — to underwrite multi-year sales pipelines and capital planning with real confidence rather than urgency-driven, incentive-deadline selling.
For contractors building out geothermal capability, the practical opportunity sits squarely in the commercial and institutional segment right now: schools, municipal buildings, and commercial campuses evaluating long-term operating cost stability are the buyers least exposed to the incentive volatility currently shaking the residential side of the market.
