Technical Report

NREL/TP-6A2-46653

September 2009

Policy Overview and Options 

for Maximizing the Role of 

Policy in Geothermal Electricity 

Development 

Elizabeth Doris, Claire Kreycik, and 

Katherine Young
National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393

303-275-3000 • www.nrel.gov

NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

Contract No. DE-AC36-08-GO28308

Technical Report

NREL/TP-6A2-46653

September 2009

Policy Overview and Options for 

Maximizing the Role of Policy in 

Geothermal Electricity 

Development 

Elizabeth Doris, Claire Kreycik, and 

Katherine Young

Prepared under Task No. GT08.3000
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iii

Acknowledgments

This report is made possible by the U.S. Department of Energy's (DOE’s) Geothermal 

Technology Program (GTP). The authors thank Doug Arent, Ted James, Margaret Mann, and 

Charlie Visser (NREL); Arlene Anderson, Hildigunnur Thorsteinsson, and Nicole Reed (DOE 

GTP); and Karl Gawell (Geothermal Energy Association) for comments on drafts throughout the 

process. The authors also thank Karen Atkison for technical and style edits. Of course, any 

remaining errors or omissions are the responsibility of the authors. 
iv

List of Acronyms

ARRA American Recovery and Reinvestment Act of 2009 

BLM Bureau of Land Management 

CREB Clean Renewable Energy Bond 

DOE Department of Energy 

DOI U.S. Department of Interior 

EGS Enhanced Geothermal Systems

EPAct Energy Policy Act 

FIT Feed-In-Tariffs

FOA funding opportunity announcement 

GRDA Geothermal Resources Development Account

GTP DOE Geothermal Technologies Program

ITC investment tax credit

kW kilowatts

LCOE levelized cost of energy

MACRS Modified Accelerated Cost Recovery

MWe megawatts (electric)

NREL National Renewable Energy Laboratory 

PEIS programmatic environmental impact statement

PTC production tax credit 

PURPA Public Utilities Regulatory Policies Act

QF qualified facility

RD&D research, development, and demonstration 

REAP Rural Energy for America Program

RPS Renewable Portfolio Standard

RPS renewable portfolio standard

USFS United States Forest Service

USGS United States Geological Survey 
v 

Table of Contents

Acknowledgments ..................................................................................................................................... iii

List of Acronyms........................................................................................................................................ iv

Table of Contents........................................................................................................................................ v

Chapter 1. Summary and Introduction...................................................................................................... 1

Chapter 2. Historical and Current Policies Influencing Geothermal Development and the Gaps 

within Them........................................................................................................................................... 4

2.1 Review of Geothermal Development and the Role of Policy ..............................................6

2.1.1 Research, Development & Demonstration Investments .............................................7

2.1.2 Public Utilities Regulatory Policies Act (PURPA) .....................................................8

2.1.3 Loan Guarantees .........................................................................................................8

2.1.4 Investment Tax Credits (ITCs) ...................................................................................8

2.2 Current In-Place Policies .....................................................................................................9

2.2.1 Federal Barrier-Reduction Policies ...........................................................................10

2.2.2 Federal Funding Opportunities and Financial Incentives .........................................12

2.2.3 State Barrier-Reduction Policies ...............................................................................16

2.2.4 State Financial Incentives .........................................................................................18

2.3 Chapter Summary ..............................................................................................................23

Chapter 3. Moving Forward: Geothermal Policy Options Overview.................................................... 25

3.1 Gaps and Opportunities in Current Policy Structure .........................................................25

3.1.1 Geothermal-Specific Policies and In-Policy Carve Outs. .........................................25

3.1.2 Improvements in Current Policies ............................................................................25

3.2 Innovative Policies and Programs ......................................................................................26

3.2.1 Feed-In Tariffs (FIT).................................................................................................26

3.2.2 Agency Coordination ................................................................................................27

Chapter 4. Conclusions and Next Steps................................................................................................. 28

References................................................................................................................................................. 29

Appendices ................................................................................................................................................ 33

Appendix 1. Case Study: The Federal Production Tax Credit and Geothermal Development33

Appendix 2. Renewable Portfolio Standard and Geothermal Development in Nevada and 

California ...........................................................................................................................34

 
1 

Chapter 1. Summary and Introduction

Geothermal electricity production1 capacity has grown over time because of multiple factors, 

including its renewable, baseload, and domestic attributes; volatile and high prices for competing 

technologies; and policy intervention. Overarching federal policies, namely the Public Utilities 

Regulatory Policies Act (PURPA),2 provided certainty to project investors in the 1980s, leading 

to a boom in geothermal development. In addition to market expansion through PURPA, 

research and development policies provided an investment of public dollars toward developing 

technologies and reducing costs over time to increase the market competitiveness of geothermal 

electricity. Together, these efforts are cited as the primary policy drivers for the currently 

installed capacity (Fleischmann 2007). 

In the United States, more than 2,000 megawatts electric (MWe) have been developed since 

1960. Still, there is evidence that the amount of geothermal resource is large relative to the 

current electric capacity (Kreycik, Doris, and Vimmerstedt, forthcoming). Today, changes to 

PURPA and inconsistent funding levels for research and development have slowed growth in 

geothermal electricity development, despite highly volatile electricity prices, an abundant 

resource, and public interest surrounding local and diverse resources. This research explores 

the effectiveness of the historical and current body of policies in terms of increased 

geothermal electricity development. Insights are provided into future policies that may 

drive the market to optimize development of available geothermal electricity resources.

Policy has the potential to drive the development of renewable energy resources through 

technology development, risk reduction, barrier reduction, and price equalization.3 Development 

of the geothermal resource markets require the following of public policy: 

• Long-term (multi-year) upfront cost defrayment to reduce risk and provide support until 

power production begins 

• Targeted policies in accordance with resource availability

• Appropriately sized incentives to meet the needs of the full range or some portion of the 

range between 250 kilowatts (kW) to multi-megawatt facilities

• Appropriate recognition of the environmental and load benefits of baseload renewable 

energy generation. 

 

1 This paper focuses on electricity production from geothermal resources. Ground source heat pumps and other 

direct applications are not considered. Electricity generation includes the range of known technologies from 

conventional hydrothermal power through enhanced geothermal systems (EGS). Geothermal resources are widely 

available, though at varying degrees of electricity-generation potential. Conventional hydrothermal resources are 

currently used in the western half of the United States, but the potential for EGS may be extensive nationwide. In 

addition to broad potential applicability, using geothermal resources for electricity generation provides a low carbon, 

non-variable source of fuel-cost-free baseload capacity (GTP 2009) 2 16 U.S.C. Sections 2601-2645. 3 Note: This report covers incentives for the development of renewable electricity development from geothermal 

energy. Barriers that apply across all electricity development, such as transmission development incentives that may 

be critical to large-scale market penetration of renewable resources, are beyond the scope of this report. However, 

several regional organizations, such as the Western Governors Association, are researching such issues. 
2 

In the case of electricity generation from geothermal resources, the relationship between the 

historical role of state and federal policy in geothermal project development is not quantitatively 

clear in meeting these needs. In this paper, the potential role of policy with respect to other 

factors that influence renewable development in general are discussed, and then more 

specifically geothermal resource development. Then historical and current policies used by the 

federal and state governments are explored to promote geothermal power and identify gaps 

within those policies (Chapter 2), as well as opportunities for improving and expanding the role 

of policy in geothermal electricity development (Chapter 3). 

Findings indicate that existing federal and state policies do not provide the comprehensive and 

consistent policy environment that is necessary to spur on development of geothermal electrical 

generation. Specifically, the current set of policies: 

(1) Lacks focus on the special needs of geothermal resource development 

(2) Lacks adequate financial resources to support market expansion and development 

(3) May be targeting a limited or incorrect audience (e.g., providing residential-scale 

incentives instead of utility incentives for large projects). 

More appropriate policies at the federal and state level could foster technology development and 

increased investment by the private sector, spurring geothermal resource development. 

Opportunities to improve and expand geothermal power policy include: 

• Streamlining and updating federal policies governing geothermal leasing, permitting, and 

drilling on federal lands. The recent Bureau of Land Management (BLM) and U.S. Forest 

Service (USFS) efforts to streamline leasing of BLM land are an example of new policies 

being implemented to reflect interest in increasing geothermal electricity development.4

• Designing state-specific policies with geothermal-specific attributes. Such attributes 

could include geothermal “set asides” in renewable portfolio standards that require 

geothermal resources to be used for a percentage of the renewable portfolio mandate. 

Although there is limited experience in “set asides” for geothermal, this strategy has been 

successful in opening markets for solar in other states (Wiser and Barbose 2008). 

Continued development of coordinated agency activities in the streamlining of electricity 

generation for geothermal resources, especially emerging technologies, could lead to 

increased market penetration.

• A better understanding of the federal and state ownership, legislative, and regulatory 

rules regarding geothermal resources and their development. The American Recovery 

and Reinvestment Act (ARRA) specified development of a data system for geothermal 

information (outlined in the body of this paper). This effort may provide the beginnings 

of a dataset that could reduce information barriers for investors and developers, thereby 

creating an incentive for developers. 

 

4 The BLM/USFS Record of Decision and Resource Management Plan Amendments for Geothermal Leasing in the 

Western United States (BLM 2008) is an example. This record streamlines leasing for geothermal electricity 

projects by categorizing BLM land areas open and closed to drilling, identifies areas targeted for development 

(focused only on hydrothermal technologies), and identifies best practices for land management in the context of 

geothermal development. The record does not address permitting and drilling. 
3 

• Exploring innovative and emerging policies, such as feed-in tariffs (FIT), that can 

provide equitable, consistent support to renewable technologies. FITs provide fixed-price 

payments, differentiated by technology, to power producers on a per-kilowatt-hour basis. 

FIT policies can be considered as an augmentation or alternative to current financial 

incentive policies. Because of the potential transparency and investor confidence they 

provide, FITs could be a powerful support mechanism for geothermal development. 

More research connecting the role of policy to geothermal resource development is necessary to 

understand the impacts of enhancing geothermal policies. Primary topics to provide more 

insights are as follows:

• At the federal level, there are two primary areas for analysis:

o A rigorous and quantitative understanding of the impact of policy on directing 

research and demonstration (R&D) over time to determine if policies create risk 

reduction and private sector uptake. 

o Additional research to understand policy impacts for increasing access to federal 

lands for renewable energy projects to determine if the benefits of geothermal power 

production outweigh the potential drawbacks (e.g., ecological impact). The December 

2008 BLM/USFS Record of Decision (BLM 2008) on leasing requires evaluation for 

impact of those revised policies on geothermal development. 

• At the state level, there are three primary directions for improving policy coverage: 

o Identify state policies with the highest impact on development of geothermal power 

production. Understanding policy design, impacts of policies, and aspects of policies 

that specifically target geothermal is necessary for better informing policy design. 

o Understand the role of policy in different resource and economic contexts. (Resource 

contexts could include both high and low temperature geothermal energy, as well as 

hydrothermal and direct use applications.) 

o Estimate the impact of potentially innovative policies that states could implement to 

promote geothermal development and power production. 

In addition to these independent federal and state research needs, informing policy decisions 

depends on the combined impacts of policies at the federal and state level on geothermal 

development. Identifying high-impact suites of policies for different contexts, and the 

government levels best equipped to implement them, would provide a wealth of information to 

both policy makers and project developers. 
4 

Chapter 2. Historical and Current Policies Influencing Geothermal 

Development and the Gaps within Them

Renewable energy development is driven by a number of interacting factors (Figure 1). It is 

therefore a challenge to identify the most effective policies for encouraging development of 

resources (Brown and Busche 2008, Doris et al. Forthcoming). In addition to these factors, 

different policies have different impacts along the technology development continuum from 

hydrothermal to enhanced geothermal systems (EGS). This in turn increases the difficulty in 

identifying the appropriate policy to maximize technology application. This chapter provides an 

overview of the major policy development challenges surrounding geothermal and then the 

historical (Section 2.1) and current (Section 2.2) policies intended to influence geothermal 

resource and technology development are reviewed. 

Terminology presents a major challenge in evaluating historical and current policies' impact on 

geothermal development. As noted in the introduction, this research focuses on geothermal 

resources for electricity production,5

 not direct-use or ground source heat pumps (a.k.a. 

geothermal heat pumps). Direct-use technologies pipe hot water from deep in the earth for direct 

uses such as heating buildings, aquaculture, and crop drying. Ground source heat pumps are heat 

exchangers connected to an in-ground, shallow (10-20 feet deep) pipe system that takes 

advantage of the relatively constant temperature of the earth to provide heating and cooling in 

residential and commercial applications. Neither of these geothermal resource uses produce 

electricity. 

It is clear that there are technological difference between these technologies and the technologies 

on the continuum from hydrothermal to EGS that convert the earth’s heat into electricity. 

However, policy recognition of the difference is lacking. In general, historical and current 

policies lump all types of resource use together. Because of the differences in technology scale, 

end use, costs, and degree of commercialization, the effectiveness of the general incentives could 

be minimized. For example, several state incentives offer a several-hundred-dollar rebate to 

geothermal technologies. Rebates at such a low level will not significantly impact single to 

multi-megawatt geothermal electricity production facilities that cost millions of dollars to 

develop and take years to get to production of electricity. However, these policies apply to all 

types of these earth-based technologies, under the nomenclature of geothermal technologies. 

Because these policies could apply to all technologies, they are all listed in this report, but the 

next steps suggest a separation of the policies identifying primary target technologies to better 

understand how different policies affect each of the technologies’ market penetration. 

There is another major challenge in the use of policy for developing geothermal resources for 

electricity: the specific resource and technology attributes combine to form unique opportunities 

for policy intervention to correct market barriers that face both fossil and renewable electricity 

production. These attributes include: 

• Geothermal resource can provide baseload electricity production 

• Geothermal is resource location dependant 

 

5 Including, but not limited to, multiple geothermal technologies such as hydrothermal, EGS, co-production, 

geopressured, low temperature, and distributed generation. 
5 

• Geothermal can be both utility and distributed scale 

• Geothermal electricity can be produced on the distributed (approximately 250-kW) and 

utility (multi-megawatt) scales

• Geothermal power plant development can take years, incurring high first costs and high 

risk to investors for long periods of time. 

As a result of the combination of all these attributes, policy designs targeting these opportunities 

could be the most effective at promoting development of the resource. These policy designs 

might include specific attributes to meet the needs of geothermal development, including: 

• Long term (multi-year) upfront cost defrayment to reduce risk and provide support until 

power production begins 

• Targeted policies in accordance with resource availability

• Appropriately sized standards and incentives to meet the needs of 250-kW to multimegawatt facilities

• Appropriate recognition of the environmental and load benefits of baseload renewable 

energy generation. 

In the remainder of this chapter an overview of the historical and current policies that can be 

applied to geothermal resources is provided. Limited observations are made on the effectiveness 

of policies related to major increases in market penetration for geothermal electricity based on 

available data. Chapter 3 provides insights into the potential policy attributes that may have a 

large impact on the market and identifies where additional and different policies could better fill 

existing policy gaps. 
6 

Figure 1. Concept drawing of contextual factors influencing renewable energy development

2.1 Review of Geothermal Development and the Role of Policy

The first major surge of geothermal resource development occurred between 1979 and 1992, 

during which more than 50 geothermal power plants were installed in three states (Fleischmann 

2007). During this time, interest in domestic energy resources increased as a result of the 1973 

oil embargo and subsequent high energy prices. In reaction, the federal government implemented 

four primary types of policies directed at the development of the geothermal electricity market: 

1) Investment in research, development and demonstration (RD&D) 

2) Mandating utilities to purchase renewable power at avoided costs through the Public 

Utilities Regulatory Policies Act (PURPA) 

3) Loan guarantees

4) Investment tax credits (ITCs).
7 

While all four of these incentives intended to encourage private-sector investment in the full 

range of geothermal technology, RD&D and PURPA were the primary drivers due to the scale 

and scope of those programs. 

2.1.1 Research, Development & Demonstration Investments

Development of geothermal resources has been promoted at the federal level through RD&D 

investment policies. RD&D investments from the public sector are correlated to increased 

patents, an indication of private-sector investment in technology development (Margolis and 

Kammen 1999). Public-sector funding for geothermal demonstration is critical to larger 

electricity installations because these require extensive siting and permitting processes, and 

public-sector involvement can reduce risk of failure along the project development pipeline. 

Public, policy-driven RD&D funds are directed along the continuum of geothermal technology 

development, from initial laboratory development to resource characterization, exploration, and 

cost-shared drilling and energy conversion technologies. The late 1970s and early 1980s 

experienced rapid growth in geothermal development that coincides nearly directly with 

increased RD&D funding (Figures 2 and 3), indicating that general RD&D findings from 

Margolis and Kammen (1999) likely apply to geothermal technologies. 

Figure 2. Public geothermal RD&D funding from 1974-2005. See Figure 3 for comparison with 

development. (Source: IEA Statistical Database)
8 

2.1.2 Public Utilities Regulatory Policies Act (PURPA)

In addition to RD&D funds, the federal government promoted the geothermal market through the 

federal passage and state implementation of PURPA in 1978, which required utilities to purchase 

renewable power at avoided power costs.6

 Under PURPA, contracts provided fixed payments for 

both energy and capacity to allow projects to obtain financing. At the time of issuance of these 

contracts, natural gas prices were high and projected to rise, so utility avoided cost was high, and 

the development of geothermal resources was economically viable given the guarantee of the 

power purchase. Geothermal development surged during the early years of PURPA from 1978 

through 1989; almost 30 contracts were executed for more than 600 MWe of new capacity in 

California alone (EIA 1995). Although PURPA is still enacted, its policy impact dwindled in the 

1990s due to a decrease in utility avoided costs with the drop of natural gas prices. 

2.1.3 Loan Guarantees

Loan guarantees are mechanisms that reduce investment risk by guaranteeing that the loan will 

be repaid by the federal government if the company defaults on the loan. The geothermal loan 

guarantee program was available between 1978 and 1982 and applied to both direct-use and 

electricity-producing technologies. The program dispersed $139.6 million in loan guarantees, 

only 47% of the guarantee limit. Of that, about $100 million was repaid by the applicants; 

debtors defaulted on $39 million, which was repaid by the government. Out of nine applicants to 

the program, four projects were not completed, three were successfully completed for direct use, 

and two hydrothermal power plants were completed (NCPA and ORMESA 1) for a total of 140 

MWe. Both successful electricity generation projects had significant existing financial resources 

(the loan guarantee covered less than 50% of project costs), indicating that the loan guarantee 

program singly was not responsible for project success, but could be applied successfully in 

niche markets. In 1982, the program was terminated due to inconclusive evidence of impact 

(especially relative to PURPA impacts) and the remaining funding was redirected, although 

existing applicants to the program were honored with continued guarantees (Levite et al. 2005).7

 

2.1.4 Investment Tax Credits (ITCs)

Finally, the federal government also worked to develop the geothermal market through ITCs 

from 1978 through 1986. The Energy Tax Act, passed in 1978, made a 10% investment tax 

credit available to geothermal developers. The impact of the tax credit is uncertain due to limited 

data on the number or size of the projects that took advantage of it. The Energy Tax Act is not 

generally considered to be a major driver in geothermal energy development relative to PURPA 

and R&D; therefore it is not explored further in this report. 

Despite the early explosion of geothermal development in the 1970s and 1980s, resource 

development continues to be dwarfed by resource availability. After the R&D investment and 

subsequent increase in geothermal development through the 1980s, a period of relative stagnancy 

 

6 Avoided costs are the marginal costs to the utility of providing one more unit of power. Put another way, it is the 

cost that the utility would pay if it were using it’s own generation capability or purchasing it from another provider. 7 This continuation of the program means that the short duration of the program would not have an impact on the 

projects accepted to it. 
9 

occurred from 1992 to 2005, where fewer new geothermal projects were developed 

(Fleischmann 2007). Most added capacity during this period was due to expansion of existing 

projects, like Salton Sea in California and Steamboat in Nevada (GEA 2008a) (Figure 3).8

Figure 3: Installed Geothermal Capacity (MW) 1960-2007, R&D investment ($M 2006) and select 

federal policies. Apparent drop in capacity around the year 2000 results from a combination of 1) a 

change in data collection and reporting methods within the Energy Information Administration at 

the DOE, resulting in apparent reduced capacity (but not actually) and 2) an actual retirement of 

capacity. This report assumes that growth flattened in the 1990s and the data discrepancy is not 

an actual drop in capacity.

2.2 Current In-Place Policies9

 

A recent resurgence in geothermal project development results from increased interest in 

domestic resources, high and volatile energy prices, and an interest in lower environmental 

impact energy choices. Today 103 hydrothermal plants are under development in 13 states (GEA 

2008b). As before, policy drivers appear to largely impact geothermal development. Key polices 

include: 

 

8 Apparent drop in capacity around the year 2000 results from a combination of 1) a change in data collection and 

reporting methods within the Energy Information Administration at the DOE resulting in apparent reduced capacity 

(but not actually) and 2) an actual retirement of capacity. This report assumes that growth flattened in the 1990s and 

the data discrepancy is not an actual drop in capacity. 9 This report does not cover proposed or pending federal legislation. 
10 

(1) The availability of the federal production tax credit (PTC), opened to geothermal energy 

in 2004 for a portion of the wind credit and to the full credit in 2005. 

(2) The existence of state renewable portfolio standards (RPS) to augment the risk-reduction 

effects created by PURPA. In addition to the power-purchase risk reduction offered by 

PURPA and state-level RPSs, the revised federal geothermal leasing regulations (BLM 

2008) are expected to expedite project timelines and drive the current market. 

(3) State and utility financial incentives (e.g., state permitting expedition, tax abatement 

policies) are being implemented to draw developers into states (Lantz forthcoming). Due 

to the piecemeal process of policy development and the different reasons policies are put 

in place, there is no unified strategy for federal and state incentives promoting geothermal 

resource development. 

The most recent additions to the policy landscape for geothermal production are the changes and 

updates to financial incentives for geothermal electricity generation in ARRA. The long-term 

impact of this policy development is not currently known due to the recent nature of the law. 

The remainder of this section outlines current federal barrier reduction policies, federal incentive 

programs, state barrier reduction policies, and state incentive policies that apply to geothermal 

development. 

2.2.1 Federal Barrier-Reduction Policies

The Energy Policy Act (EPAct) of 2005: This act had two primary provisions affecting 

geothermal energy production. First, it authorizes an update to a 1978 US Geological Survey 

(USGS) resource assessment. Second, EPAct 2005 outlines the process for unitization of 

geothermal resources by federal geothermal leaseholders. 

The 1978 resource assessment identified geothermal resources for hydrothermal power 

generation that exist throughout the western United States, an area with a high percentage of 

federal lands. The new assessment of moderate- and high- temperature geothermal resources in 

13 states identified 241 geothermal sites on private or accessible public lands in the western 

United States (USGS 2008). An estimated 90% of the nation’s hydrothermal resources are 

located on federal lands (DOI 2008). Because leasing public land has historically presented a 

challenge for developers, it is necessary for the government to facilitate their leasing and access 

to areas with known geothermal resources. 

EPAct 2005 amended the leasing regulations for geothermal resources located on federal lands. 

The legislation requires that the bidding process be competitive (as opposed to sealed), which 

has opened up the resource nomination process to the market. The BLM is required to hold lease 

sales at least every two years to ensure that leasing applications are processed. Furthermore, the 

legislation required that a backlog of leasing applications prior to 2005 be processed. Finally, 

EPAct changed royalty shares between federal, state, and county governments to 25%, 50%, and 

25%, respectively (GEA 2005). 

Since passage of the bill, the BLM has held four auctions, summarized in Table 1. These 

auctions have yielded the highest per-acre bid in all of the BLM’s historical auctions. 
11 

Table 1. BLM Land Auction Size and Revenue for Geothermal Production 

Date

Average 

Price per 

Acre 

State Acres

Total 

Revenue* 

($M)

Price Per Acre

June 20, 2007 $195 ID 15,490 $2.0 $129

UT 6,018 $2.2 $366

Aug. 14, 2007 $157 CA 2,700 $8.0 $2,963

NV 122,849 $11.7 $95

Aug. 5, 2008 $268 NV 105,211 $28.2 $268

July 13, 2009 $36

CA 11,392 $0.13 $12

NV 243,727 $8.9 $37

UT 228 $0.06 $251

Total 507,615 $61

*Totals include bonus bids, first year’s rental and processing fees. 

Sources: BLM 2007a, BLM 2007b, DOI 2008b, BLM 2009.

In 2007, the BLM’s Deputy Director, Henri Bisson, stated that the new regulations related to 

auctions and leasing put the BLM in a good position to facilitate geothermal development, and 

that the shift to a competitive bidding process has led to a pivotal moment for renewable energy 

development on public lands (Renewable Energy World 2007). Beyond the auctions of available 

acreage, the BLM, in coordination with the Department of the Interior (DOI), released a new 

record for leasing decisions on BLM land (BLM 2008). This record, released on December 17, 

2008, allocates BLM land available for drilling, identifies a reasonable development scenario for 

the land, and adopts best practices in leasing and management practices for the land. The record 

is expected to streamline and reduce transaction costs, thereby reducing investment risk in 

geothermal development. 

The second provision having an impact on geothermal electricity production is the procedure 

outlined in EPAct 2005 for the holders of federal geothermal leases to unite to ensure efficient 

use of geothermal pools. Unitization allows for multiple landowners or federal leaseholders to 

combine the geothermal resource to reduce necessary investments in equipment and optimize the 

use of the resource through identification and exploitation of the most economic resources first. 

The regulations, released in their final version in 2007, define two types of agreements that can 

be made between federal leaseholders:

(a) Unit agreement. An agreement or plan of development and operation for the 

production and utilization of separately owned interests in the geothermal 

resources made subject thereto as a single consolidated unit without regard to 

separate ownerships and which provides for the allocation of costs and benefits on 

a basis defined in the agreement or plan.

(b) Cooperative agreement. An agreement or plan of development and operations 

for the production and utilization of geothermal resources made subject thereto in 

which separate ownership units are independently operated without allocation of 

production (43 C.F.R. Part 3280, CFR 2009). 
12 

The unitization agreements outlined in the regulations specify the process the leaseholders use 

for unitization on federal lands, and represent agreements between the BLM and the entities 

holding the leases. Leaseholders must negotiate between themselves to identify the specific 

distribution of costs and benefits for each leaseholder, as this is outside the jurisdiction of the 

BLM. The process specifies that the unitizing leaseholders present a unit plan to the BLM for 

review and approval and the BLM officially establishes the geothermal production unit on 

federal land (Mastow and Braff 2008). 

PURPA Standard Offer Contracts: PURPA was implemented beginning in 1978 and still drives 

some geothermal development. Since PURPA’s inception, the avoided costs to utilities have 

declined, making geothermal less attractive for developers in pursuit of PURPA long-term 

contracts. There are some situations, however, where avoided costs are high enough to attract 

geothermal developers. In Idaho, for example, PURPA rules led to the development of the Raft 

River project (which came online in 2008) because avoided cost rates are higher than might be 

encountered in other states due to higher natural gas prices (Fleischmann 2006a). 

Leasing Rights. Access to federal lands is limited due to environmental concerns. There are 

administrative and regulatory barriers for project developers to site their plant on public lands. 

Different requirements exist for BLM, USFS, and Tribal lands. Acquisition and leasing 

regulations vary depending on the type of federal land in question (GEA 2005). 

To address this barrier the BLM completed an analysis on environmental impact in order to 

facilitate leasing processes (BLM 2008). This Programmatic Environmental Impact Statement 

(PEIS) defines appropriate resource-available areas, streamlines the leasing process and spells 

out best practices for project and land management for hydrothermal projects in the western 

United States (BLM 2008). This PEIS is the starting point for interagency coordination and 

public-private partnership in project development. A potential addition to the guide would be to 

legislate at the federal level that the BLM can assign geothermal rights to current oil and gas 

lease holders, which would allow the current lease holders to sell geothermal-based electricity 

back to the grid. Implementation of the guide and continued development of partnerships is 

critical to success of geothermal projects. Additionally, a PEIS addressing leasing issues with 

EGS projects and addressing the geographic breadth of the United States would increase the 

effectiveness of the coordination and broaden applicable technologies. 

2.2.2 Federal Funding Opportunities and Financial Incentives

Research, Development, and Demonstration: The DOE's Geothermal Technologies Program 

currently funds R&D and technical assistance for exploration and development (DOE 2008). 

Cost-shared drilling for exploratory wells helps geothermal projects become economical and 

draw in developers. Note that while historical and current geothermal projects have been 

hydrothermal in nature, RD&D projects in 2008 focused solely on EGS: 17 industry projects 

were awarded funding for component EGS research and development, and 4 EGS 

demonstrations projects were awarded funding. This intentional shift in focus is aimed at 

promoting development of EGS projects in the United States. 
13 

Federal Tax Incentives: Since 2005 the federal government has offered a production tax credit 

(PTC) for geothermal electricity production. The PTC provides a significant subsidy: 1.9¢/kWh 

for 10 years for geothermal plants that are placed in service before the expiration of the credit 

program. In October 2008, the PTC expiration date was extended from December 31, 2008, to 

December 31, 2010, through the Emergency Economic Stabilization Act. In addition to the PTC, 

several other federal tax incentives are available, including the 10% investment tax credit (ITC) 

for all expenditures on geothermal equipment except that required for transmission, and 

Modified Accelerated Cost Recovery System (MACRS), allowing for an accelerated 

depreciation on a 5-year tax schedule, which amounts to approximately 15% investment 

incentive if the buyer has enough working capital. See Appendix 1 for a case study on the 

impact of the PTC. 

In February 2009, passage of ARRA changed the role of the PTC and ITC for geothermal 

facilities. The section of ARRA most relevant to tax incentives for geothermal electricity 

production is section 1603, a U.S. Department of Treasury grant that allows taxable entities to 

take the 10% ITC or 30% PTC (technology dependant) as a cash grant. The 30% PTC is first 

converted to a 30% ITC, and then converted to the cash grant. Treasury guidance (U.S. 

Department of Treasury 2009) indicates that energy produced by a geothermal facility (e.g., the 

power plant equipment) is eligible for 30% of the cost basis and that 10% of the cost of the 

equipment used to derive the energy from the deposit (e.g., wells) is eligible (Table 2). The 

Treasury guidance also states that any overlap in the geothermal definitions in the tax codes 

results in either 30% or 10% of the facility being eligible, but not both. Other changes related to 

geothermal policy related to the ARRA are the extension of the production tax credit (PTC) − 

should developers opt to take that instead of the Treasury grant − beyond 2009 to 2013. The PTC 

is available to geothermal projects for 10 years, providing the facility is in use by 2013. The 

long-term impacts of this economic stimulus-related legislation is unknown at this early stage of 

implementation, but given the length of time (years) for utility scale geothermal resource use to 

be realized, the new incentives may have the most impact on smaller-scale (approximately 250-

kW) distributed geothermal technologies. 
14 

Table 2. Geothermal Definitions in U.S. Code and Applicable Cost Basis Treasury Grant 

Program 

Geothermal 

Defined in 

Section

Definition

Applicable 

% of 

Eligible 

Cost Basis

Credit 

Termination 

Date

Geothermal 

in IRC 

Section 45

Geothermal energy. The term "geothermal energy" 

means energy derived from a geothermal 

deposit (within the meaning of section 613(e)(2) 

[26 USCS § 613(e)(2)]).

30% Jan 1, 2014

Geothermal 

in IRC 

Section 48

(a,3,A,iii) equipment used to produce, distribute, 

or use energy derived from a geothermal deposit 

(within the meaning of section 613(e)(2)), but only, 

in the case of electricity generated by geothermal 

power, up to (but not including) the electrical 

transmission stage.

10% Jan 1, 2017

Notes

26 USC 613(e): Percentage depletion for geothermal deposits (1) In general in the case of 

geothermal deposits located in the United States or in a possession of the United States, for 

purposes of subsection (a) - (A) such deposits shall be treated as listed in subsection (b), and (B) 

15 percent shall be deemed to be the percentage specified in subsection (b). (2) Geothermal 

deposit defined for purposes of paragraph (1), the term ''geothermal deposit'' means a geothermal 

reservoir consisting of natural heat which is stored in rocks or in an aqueous liquid or vapor 

(whether or not under pressure). Such a deposit shall in no case be treated as a gas well for 

purposes of this section or section 613A, and this section shall not apply to a geothermal deposit 

which is located outside the United States or its possessions. (3) Percentage depletion not to 

include lease bonuses, etc. In the case of any geothermal deposit, the term ''gross income from the 

property'' shall, for purposes of this section, not include any amount described in section 

613A(d)(5). Source: http://vlex.com/vid/sec-percentage-depletion-19209150 , accessed August 

2009

Federal Grants and Loans: The federal government implements several grant and loan programs 

for which geothermal electric systems are eligible. Geothermal projects can receive Tribal 

Energy Program grants and U.S. Department of Agriculture Rural Energy for America Program 

(REAP) grants. Additionally, the federal government provides loan guarantees for renewable 

energy projects, including development of geothermal resources, as listed in Title XVII of the 

EPAct 2005. Through 2005, the last year for which data is available, there are no geothermal 

electricity projects participating in the program (Walters et al. 2006).

Non-Tax Incentive ARRA Funding: In addition to the tax incentive changes for private 

companies previously listed, ARRA also provides $350 million for geothermal research and 

demonstration, as well as funding for innovative exploration techniques. It is too early in the 

implementation of this ARRA funding to determine impacts of the policy. As of the writing of 

this report (September 2009), the following funding opportunity announcements (FOAs), valued 

at $275 million10, have been released publically and closed:11

 

10 There is also a $50 million opportunity (closed August 6, 2009) for geothermal heat pump demonstration projects, 

data collection and analysis, and the development of a national certification standard. 

 

11 See http://www.energy.gov/recovery/funding.htm#RENEWABLE_ENERGY for more information
15 

o Validation of Innovative Exploration Technologies EISA Section 613 addresses the 

demonstration of innovative site characterization and/or drilling exploration 

technologies. The goal of this $100 million FOA, which closed on 7/17/09, is to 

reduce the high level of risk during early stages of geothermal project development 

by funding the validation of innovative exploration activities to locate undiscovered 

geothermal systems and increase the reliability of site characterization to prioritize 

target sites for energy production. 

o Geothermal Energy Production from Low-Temperature Resources, Co-produced 

Fluids from Oil and Gas Wells, and Geopressured Resources. EISA Section 616 

addresses geothermal energy production from oil and gas fields as well as the 

recovery and production of geopressured resources, while EPAct 2005 Section 

931(a)(2)(C) includes authorization for geothermal energy production from low 

temperature geothermal resources. The goal of this $50 million FOA, which closed on 

7/17/09, is to demonstrate the technical and economic feasibility of geothermal 

energy production from these nonconventional geothermal resources. 

o Geothermal Data Development, Collection, and Maintenance. EPAct 2005 Section 

931(a)(2)(C) includes authorization for continued data submission to the National 

Geothermal Data System (NGDS) created from Funding Opportunity Announcement 

DE-PS36-08GO98020. The goal is to develop, collect, and maintain data for all 50 

states for the NGDS in order to make geothermal data available to the public and 

reduce the risk associated with initial stages of geothermal development. The $30 

Million FOA closed on 7/17/09. 

o EGS Demonstration - $90 million.12 This funding is for the further scientific 

exploration of the technologies and strategies necessary for achieving the potential of 

EGS. 

o EGS Research and Development Analysis. This is an $80 million FOA to support 

EGS technology development through cost-shared R&D. The goal is to make EGS a 

major contributor to baseload generation. 

IRS Clean Energy Renewable Bonds. Public entities are eligible to participate in Clean 

Renewable Energy Bonds (CREBs). These bond mechanisms were created by the 2005 Energy 

Tax Incentives Act and provide a tax credit to purchasers instead of an interest payment from the 

public issuing entity.13 In the two previous rounds of issuance, no CREBs have been issued by 

governments looking to use the mechanism for geothermal projects (Cory et al. 2008). The bonds 

are primarily used for solar projects, but the reason for a lack of geothermal projects is unknown: 

it is possible that there is a lack of knowledge of the program in the geothermal community, that 

larger scale projects are eligible for the program but are required to bring a large percentage of 

other financing in order to successfully participate, or that there is a lack of projects with enough 

interested bond purchasers, among other reasons. 

 

12http://www07.grants.gov/search/announce.do;jsessionid=qJLWKzFTtsXJ0kMhx5gDhPH6DGRVjGzHxbfPyvr26j

9rK84n1NNw!1656926990 

13 Section 1303 of the Energy Tax Incentives Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005) (the “2005 

Act”) added section 54 to the Internal Revenue Code. 
16 

2.2.3 State Barrier-Reduction Policies

State R&D Programs: Because the scale of research and development is typically large and 

requires extensive investment, states are generally not well positioned to implement R&D 

programs without federal support. California is the only state with a state-funded R&D program 

for geothermal. Using funds from leasing royalties, California makes R&D funds available to 

qualifying applicants under the Geothermal Resources Development Account (GRDA) (CEC 

2008). From its inception in 1980, the program has funded at least four geothermal projects, as 

well as a number of direct-use projects (CEC 2008). 

State Renewable Portfolio Standards: State renewable portfolio standards (RPS) policies have 

been cited by developers as a significant driver for geothermal development, as they encourage 

utilities to sign power purchase agreements for geothermal power (Fleischmann 2007, See 

Appendix 2) and serve to reduce the uncertainty that power available will be purchased. Eight of 

the thirteen states with planned geothermal plants have passed renewable portfolio standards. 

Only New Mexico’s RPS has a set-aside for geothermal (together with biomass for a 10% total 

starting in 2011), in an effort made by the legislature to ensure a diversified energy portfolio 

resulting from the RPS. To encourage and to attribute higher value to geothermal development, 

New Mexico’s RPS has a two-fold multiplier for geothermal energy. This multiplier strategy 

within the RPS mechanism is most commonly used for solar technologies that are rarely the 

least-cost option. Table 3 compares the current state of the market and the RPS targets in states 

with current or planned geothermal development (in these cases, hydrothermal, due to the 

commercial stage of the technology). 

Table 3. RPS Targets and Installed and Planned Capacity in States with Hydrothermal 

Geothermal Development

State

Installed 

Hydrothermal 

Capacity (MWe)

Hydrothermal 

Capacity in 

Development 

(MWe) (Phase 1-

4, high estimate)

Current RPS 

Target

Year of First 

Requirement

California 2605.3 1365.6 20% by 2010 2003

Nevada 333 3297.4 25% by 2025* 2006

Utah 50 194 No RPS

Hawaii 35 8 40% by 2030* 2010

Idaho 15.8 326 No RPS

Alaska 0.68 100 No RPS

Wyoming 0.25 0.2 No RPS

New Mexico 0.24 10 20% by 2020** 2002

Washington 0 Undefined (1

project) 15% by 2020 2012

Oregon 0 318.4 25% by 2025 2011

Arizona 0 20 15% by 2025 1999

Colorado 0 10 20% by 2020 2007

Florida 0 1 No RPS

*recently updated policy

**for IOUs. 10% by 2020 for rural electric cooperatives. Policy contains a geothermal and biomass set 

aside of 10% of the total requirement beginning in 2011.

Source: GEA 2009, Wiser and Barbose 2008, DSIRE 2009.
17 

Despite developers citing RPS as market drivers for geothermal, there is currently no correlation 

between states with RPS and increased geothermal development. Since geothermal projects 

require multiple years from planning to implementation, RPS policies must be in place for 

multiple years to have an effect, possibly explaining the lack of correlation between policy and 

capacity growth (see Doris et al Forthcoming) for more information on connecting policy with 

capacity and generation of renewable resources). States with ambitious RPS targets (like 

California and Nevada) seem to have more geothermal power plants in development, although 

this analysis did not examine the relationship between a higher level of geothermal resources and 

the existence of an RPS that strongly encourages geothermal development. 

Other State Policies (Ownership, Unitization, and Regulatory Permitting):

State policy relating to geothermal resources for electricity production varies by state and is not 

well categorized or published in aggregate. Two particular challenges to geothermal 

development would be alleviated by categorized and streamlined access to information 

including: (1) ownership of the resources and (2) potential or requirements for unitization of state 

and private land. The impact of these policy variations across state lines may be a barrier to 

geothermal development, so further research and better understanding of the laws and structures 

(such as through the ARRA data system described previously) could be of high value to 

developing geothermal resources.

Ownership of the geothermal resources can be ownership of the surface rights (e.g., Nevada 

Revised Statutes 534A.050, Oregon Revised Statutes Section 522.035, Revised Code of 

Washington Section 78.60.040), the mineral rights (e.g., California), or neither (e.g., Colorado 

Revised Statutes 37-90.5-104) (Fish and Heaps 2009). Lack of resource ownership clarity can 

create barriers to development because it requires extensive due diligence and research, often 

extending the length of time of resource development, which, in turn, can create challenges to 

securing project financing. While uniformity of ownership is not necessary, a clear 

understanding of state ownership rights and processes could reduce this barrier to development. 

In addition to ownership, the lack of understanding of geothermal resource unitization rules and 

regulations may be a barrier to efficient development of geothermal resources. Unitization of 

geothermal resources allows multiple landowners or leaseholders to pool the geothermal 

resource to optimize the expenses associated with resource access (e.g., equipment) and 

distribute the energy benefits, thereby more efficiently using the resource. While many states 

(e.g., Utah Administrative Code R850-27) clarify the ownership and unitization rights of 

leaseholders on state lands, unitization of private resources is less clearly outlined. State rules 

vary regarding private land unitization, from the state actively regulating the resource (e.g., 

Arizona Revised Statutes §27-664 Cooperative development agreements; unitization) to the state 

taking an interest when the resource is deemed in the public interest (e.g., Oregon Revised 

Statutes 522.405) to states being silent on private land unitization. Lack of state guidelines for 

unitization could be reducing the incentive for landowners to optimize the geothermal resources 

available.

Regulatory permitting, too, can be a hindrance to geothermal development (Hance 2005). 

Different, and in many cases, multiple state regulatory bodies are responsible for permitting 

geothermal wells; the process is not always straightforward. Many states have regulations for 
18 

permitting water wells and oil/gas wells, but not for geothermal wells specifically (Fish and 

Heaps 2009). This lack of clarity can cause delays in permit approvals and in project 

development, increasing geothermal capital costs due to increased financing costs. 

Ownership, unitization, and regulatory permitting are only three potential contextual issues with 

broad impacts on the development of geothermal resources. Increased clarity of the rules and 

interests of states is a first step in gaining better understanding of the process that needs to be 

undertaken by developers in each state. A broad review of the potential legislative and regulatory 

barriers to development could identify further areas where regulatory and legislative clarity at the 

state level could contribute to the reduction of barriers to resource development. 

2.2.4 State Financial Incentives

State Tax Incentives: Fifteen states offer one or more tax incentive(s) that can be applied to 

geothermal development.14 Table 4 describes the current level of these incentives and compares 

the incentive availability with the amount of installed and planned capacity in the state. There is 

currently no identifiable, direct relationship between installed capacity and current tax 

incentives, regardless of the amount of time the tax credit has been in place. This may be because 

of (1) the inadequacy of incentives to spur development in the state, as a result of other 

regulatory and siting barriers, (2) the relatively short time state incentives have been in place, (3) 

a mismatching of resource and incentive availability, or (4) a lack of focus on geothermal 

resources as a potential technology to apply for the incentive. 

A critical aspect of state tax incentives is that they apply to commercially viable or near 

commercially viable technologies, not technologically emerging ones. This is particularly 

important in the case of geothermal technologies due to the emerging nature of EGS technology. 

While the current incentives may not be highly effective for maximizing the already-commercial 

hydrothermal technologies, well designed and funded state incentives may play a role in the 

development of markets for EGS when that technology is near commercial, as well-designed tax 

incentives targeting commercial technologies have been shown to have an impact on utility scale 

renewable energy development (Lantz and Doris, forthcoming). 

 

14 Tax incentives come in four primary types: property, sales, investment, and production. Each type targets different 

points of the technology delivery cycle and has strengths and weaknesses. For a full discussion of tax incentives for 

renewable energy development, see Brown and Busche 2008 and Lantz and Doris, forthcoming.
19 

Table 4. State Corporate, Sales, and Property Geothermal Electric Tax Incentives Ranked by 

In-ground Capacity

Available Tax 

Incentives Value Date Effective

Expiration 

Date

Installed 

Capacity 

(MW)

Hydrothermal 

Capacity in 

Development 

(MW) (Phase 

1-4, high 

estimate)

NV

Sales Tax Exemption Varies 7/2009 6/2049

333 3297.4

Local Option: Property 

Tax Financing 

Authorization

Varies 5/2009 None

Property Tax 

Exemption 100% 7/1/1983 None

UT

Sales Tax Exemption 100% 7/1/2004 6/30/2019

50 194

Production Tax Credit $0.0035/kWh 

for 4 years 1/1/2001

Evaluated 

on or after 

2012

HI High Tech Business 

Investment Tax Credit 100% 7/1/2001 12/31/2010 35 8 

ID

Sales Tax Exemption 100% 4/12/05 7/1/2011

15.8 326

Property tax exemption

100% 

(geothermal 

producers 

must pay a tax 

of 3% of gross 

energy 

earnings)

1/1/2008 None

WY Sales Tax Exemption 100% 7/1/2003 6/30/2012 0.25 0.2

NM 

Local Option: Property 

Tax Financing 

Authority

Varies 7/1/2009 none

0.24 10

Product Manufacturers 

Tax Credit

5% of qualified 

expenditures 7/1/2006 None

OR

Property Tax 

Exemption 100% 1/1/1976 7/1/2012

0 318.4

Investment Tax Credit

50% of eligible 

costs (up to 

$10 M)

1/1/2007 1/1/2016

AZ Property Tax 

Exemption 100% 6/2009 None 0 20

CO

Sales Tax and 

Property Tax 

exemptions: Local 

option to implement.

Varies by 

district 8/3/2007 None

0 10

Property Tax 

Assessment 

Varies, rate set 

annually by

Division of 

Property 

Taxation

1/1/2001 None
20 

FL Production Tax Credit $0.01/kWh

(up to $5 M) 1/1/2007 6/30/2010 0 1 

IN Property Tax 

Exemption 100% 1/1/1975 None 0 0 

KS Property Tax 

Exemption 100% 1/1/1999 None 0 0 

MD Production Tax Credit

$0.0085/kWh

for 10 years 

(up to $2.5 M)

7/1/2000 12/31/2010 0 0 

MT Investment Tax Credit 35% 1/1/2002 None 0 0 

ND

Property tax exemption 100% 7/1/2007 None

0 0 

Investment tax credit 15% (3% for 5 

years) 1/1/2001 1/1/2011

OK Production Tax Credit

$0.0025/kWh -

$0.0075/kWh 

for 10 years

1/1/2003 12/31/2015 0 0 

PA Production Tax Credit 15% project 

costs 7/9/2008 12/31/2016 0 0 

SD Property Tax 

Exemption 50% 1/1/1975 None 0 0 

VT 

Local Option: Property 

Tax Financing 

Authorization

Varies 5/2009 None 0 0 

DSIRE Web site search page: 

http://dsireusa.org/searchby/searchtechnology.cfm?&CurrentPageID=2&EE=0&RE=1, Accessed September 

2009, GEA 2009

The table shows that a handful of states – including Montana, North Dakota, South Dakota, 

Indiana, Kansas, and Maryland – offer tax credits for geothermal but have not experienced any 

market development in electricity production from geothermal. Note that some of these 

incentives, considering relatively small scale and scope, are likely to target nonelectricity 

generation technologies, such as direct-use geothermal and ground source heat pumps. As a 

result, there is potential that the impact of the programs is manifested in those markets, and the 

impact on geothermal capacity development is masked. The western states with tax incentives 

(e.g., Montana, North Dakota, Indiana, and Kansas) have some limited resource available as well 

as a tax incentive, and little to no development. This indicates inappropriately sized or targeted 

incentives, and, based on the small size of incentives, is likely to be a reflection of a focus on 

nonelectricity generation technologies. Other barriers, such as regulatory and land-use barriers 

may be larger opportunities for policy to have an impact on geothermal development in these 

locations. In California, for instance, electric capacity has developed in the presence of other 

incentives, but without a tax incentive. 

Non-Tax-Related State Financial Incentives: Sixteen states and the District of Columbia have 

other financial incentives for geothermal power including grants, loans, and loan guarantees. 

Table 5 shows the availability of “geothermal” incentives in states compared with the amount of 

operating or planned geothermal capacity. There is not a significant correlation between these 

incentives and higher installed hydrothermal capacity in a state. As with tax incentives, these 

incentives are likely so broad in definition that the benefit to geothermal electricity production 

decreases. Even when appropriately applied to geothermal in scale and scope, effectiveness of 

the incentive changes with changes and advances in technology, and that may be critical in the 

case of geothermal technology development. 
21 

It is unknown whether current or planned plants have received grants or loans under these state 

policies, but evidence indicates that the largest projects have not taken advantage of these 

incentives. For example, the Alaska Energy Authority’s grant program was established after the 

Chena Hot Springs plant went in the ground (GEA 2008a). Additionally, Idaho’s first 

commercial geothermal plant was a qualifying facility (QF) under PURPA (Fleischmann 2006a) 

and the Idaho Renewable Energy Bond program established in 2005 excludes PURPA QFs. 

Table 5. Non-Tax State Renewable Incentives That Can Apply to Geothermal by State and 

Installed/Planned Capacity

Incentive

Year Enacted 

(or inclusive 

of 

geothermal)

Details

Installed 

Capacity 

(MW) 

Hydrothermal 

Capacity in 

Development 

(MW) (Phase 1-4, 

high estimate)

CA Public Benefits 

Fund 1998

Renewables: 2002-2006: 

$135 M annually; 2007: $135 

M; 2008-2011: $65.5 M 

annually

2605.3 1365.6

ID State Bond 

Program 2005

Bonds extended to both 

facilities qualifying and not 

qualifying under PURPA

15.8 326

AK 

Alaska Energy 

AuthorityRenewable 

Energy Grant 

Program

2008 Program budget for FY 2009 

is $100 M 0.68 100

OR

Oregon 

Energy TrustPublic Benefits 

Fund And 

Grant Program

2002

General fund for renewables 

is $12 M annually through 

2025. Grants for 

hydroelectric, geothermal 

electric, wave energy, and 

fuel cells are provided under 

the public benefits fund. The 

program budget is ~$2 M 

annually.

0 318.4

Small-Scale 

Energy Loan 

Program

1980

Low-interest loans for smaller 

projects, generally awarded 

between $20,000 to $20 M

FL

Renewable 

Energy 

Technologies 

Grants 

Program

2006

Matching grants for 

demonstration, 

commercialization, and R&D 

projects. Program budget is 

$15 M for FY 2006-07; $12.5 

M for FY 2007-08; $15 M for 

FY 2008-09

0 1 

DE R&D Grants 2003

Award equals 35% cost of 

qualifying projects up to 

$250,000 per project. The 

program budget is $288,000 

annually.

0 0 

DC

Renewable 

Energy 

Demonstration 

Project (R&D 

Grants)

2006

Four rounds of grants have 

been awarded. There may be 

additional funds available for 

2009. 

0 0 
22 

IL Public Benefits 

Fund 1997

The renewable energy resource 

trust fund is funded by a 

ratepayer surcharge that 

supports grant and rebate 

programs through the Illinois 

Department of Commerce and 

Economic Opportunity. The 

fund is valued at approximately 

$100M per year. 

0 0 

MA Public Benefits 

Fund 1998

The Renewable Energy Trust is 

funded by a ratepayer 

surcharge that supports grant 

and rebate programs through 

the Massachusetts Technology 

Collaborative. The fund is

valued at approximately $25M 

per year.

0 0 

ME 

Public benefits 

fundVoluntary 

Renewable 

Resources 

Grants

2000

A voluntary public benefits fund 

supports the R&D Grant 

program. As of July 1, 2007 the 

fund contained ~$400,000. 

Individual awards up to $50,000 

for small-scale demonstration 

projects.

0 0 

MS 

Energy 

Investment 

Loan Program

1989

Low-interest loan program (3% 

below prime rate, 7-year 

payback). Amount ranging from 

$15,000 to $300,000.

0 0 

MT Public benefits 

fund 1997

Fund is ~$10 M annually. The

fund is set to expire at the end 

of 2009.

0 0 

NE

Dollar and 

Energy 

Savings Loans

Low-interest loan program, 

mainly for energy efficiency 

improvements. Renewables are 

eligible if included in a list of 

“pre-qualified improvements” 

with minimum efficiency

standards, or if the project will 

have a reasonable payback 

period. Loans range from 

$75,000 to $175,000. 

0 0 

NJ Public Benefits 

Fund 1999

Total fund size for renewables 

between 2001 and 2008 was 

approximately $300 M. The 

budget proposal for 2009-2012 

is roughly $243 M for 

renewables.

0 0 

NY Public Benefits 

Fund 1996

The total fund is equal to $1.87 

B (1998-2011), for the period 

2006 to 2011 $182 M is 

allocated to R&D (including 

renewables).

0 0 

OH Public Benefits 

Fund 1999

This is funded by a ratepayer 

surcharge that supports grant 

and rebate programs through 

the Advanced Energy Program. 

The fund is valued at 

approximately $5M per year.

0 0 
23 

RI

Renewable 

Energy Fund 

Loans

2008

For projects that directly benefit 

the state of Rhode Island. Loan 

terms vary depending on 

project type. 

0 0 

Public Benefits 

Fund 1996

Since 2002 there has been a 

separate surcharge for 

renewables. The annual budget 

for renewables between 2003 

and 2013 is ~$2.4 M. A 2008 

amendment has allocated half 

of that fund for municipal 

renewable projects. 

TN

Small 

Business 

Energy Loan 

program

1987

No or low-interest loans for 

small businesses up to 

$300,000.

0 0 

WI

Energy 

Independence 

Fund Grant 

and Loan 

Program

2008

Cost-sharing grants (R&D) and 

low-interest loans that cover a

maximum of 25% of the project 

cost. The fund is a 10-year, 

$150 M initiative. Typical 

awards range from $100,000 to 

$500,000

0 0 

VT Public Benefit 

Fund 2009

The Clean Energy 

Development Fund is funded by 

Entergy in an agreement 

pertaining to a Vermont Nuclear 

Plant, and promotes the 

deployment of cost effective 

renewable energy technologies. 

The program is funded annually 

between $6-7.2 million 

annually.

0 0 

DSIRE Web site search 

page:http://dsireusa.org/searchby/searchtechnology.cfm?&CurrentPageID=2&EE=0&RE=1. Source: GEA 

2009 and DSIRE 2009.

Note: Incentives in this table may also apply to ground source heat pumps and direct-use technologies as 

well as electricity production.

Despite the lack of correlation between individual state policies, developers seeking out RPS and 

other policies indicate that policies are of some value to developers looking for energy 

investments (Fleischmann 2007). The previously described contextual factors (including 

electricity prices and volatility, resource availability, regulatory environment, amount of 

previous characterization, exploration, and drilling has occurred) are important, but are difficult 

to quantify in the literature. Research into their relative impacts is just getting under way (e.g., 

Brown and Busche 2008, Doris et al. forthcoming). 

2.3 Chapter Summary

To summarize the review, the historical and current policy picture reflects a piecemeal approach 

to geothermal resource development, and often reflects geothermal development as a part of 

collective renewables policies, without geothermal-electric specific policies in place. Moreover, 

multiple technologies that involve using the earth are sometimes defined as geothermal in the 

policy language, despite the differences in public policy needs of the technology. These 

challenges result in difficulties in evaluating policy impacts on electricity from geothermal 
24 

resources, because electricity production technology is then in competition with other renewable 

technologies that may be further along in development or better understood by the public, and 

are therefore chosen. 

The findings are inconclusive as to the direct impact of specific policies on electricity production 

from geothermal development, although there appears to be a connection between federal 

policies and historical geothermal development. Finally, there is empirical and qualitative 

evidence that the impact of state-level policies are funding-limited instead, resulting in a lack of 

private sector investment related to the uncertainty of actually receiving the incentive before the 

state funding is exhausted. That is, incentives for central generation geothermal need to be sized 

appropriately to the amount of investment needed larger scale, and often state policies are too 

limited in their ability to fund incentives to have a large impact on project costs. 

These two results – lack of a focus on geothermal-electric development specifically and lack of 

adequate resources to support the specific technology – form the basis for the final section of this 

report, which identifies options for filling the gaps in policy development through additional 

measures and innovative mechanisms (e.g., feed-in tariffs) that may have a larger impact than the 

current suite of policies. 
25 

 

Chapter 3. Moving Forward: Geothermal Policy Options Overview

This section identifies the primary gaps in current geothermal development policies and use 

current and innovative policies to fill those gaps to optimize development. As described in the 

introduction to Chapter 2, the following policy attributes may be the most effective at correcting 

market failures that apply to geothermal resources: 

• Long-term (multi-year) upfront cost defrayment to reduce risk and provide support until 

power production begins 

• Targeted policies in accordance with resource availability

• Appropriately sized incentives to meet the needs of the full range or some portion of the 

range between 250 kilowatts (kW) to multi-megawatt facilities

• Appropriate recognition of the environmental and load benefits of baseload renewable 

energy generation. 

The findings indicate that there are several gaps in current policies where they could be 

strengthened to increase their impact, including increasing funding and policy consistency. 

3.1 Gaps and Opportunities in Current Policy Structure

Current in-place policies have not triggered large-scale market penetration for geothermal 

relative to the potential resource. Primary observations regarding geothermal policies are is that 

they do not focus on the geothermal market specifically, they do not present a cohesive slate of 

policies for optimizing development, and there is evidence that they are not appropriately funded 

or targeted for optimizing geothermal growth. Within this context, the primary gaps within the 

current slate of policies are:

3.1.1 Geothermal-Specific Policies and In-Policy Carve Outs. 

Developing policies specifically for geothermal electricity production would allow for targeting 

of the specific needs of the technologies that take advantage of geothermal resource, rather than 

for a suite of technologies with variant needs. Increasing the specificity of the policies can lead 

to higher impact policies. In addition, for policies that can target large-scale capacity building, 

such as RPS, the use of targeted geothermal development has been limited. Solar technologies 

have seen success in this strategy, as it increases the value for the more expensive technology 

and can create investor certainty to encourage development. The one state that has done this for 

geothermal is New Mexico, and while outcomes are yet to be determined, it appears to be 

increasing interest in geothermal development in the state. 

3.1.2 Improvements in Current Policies

In addition to implementing new policies, aspects of current policies can be improved to 

strengthen their impact. These aspects include:

Consistency. The growth pattern of emerging technologies can depend on policy funding levels 

and consistency of policies over time. Geothermal facilities require multiple years to plan and 
26 

build, so the reduction of risk to investors and builders needs to be secure throughout the process, 

or the level of risk will become a barrier to development. Policies that target geothermal need to 

ensure consistency by being in place for at least 8-10 years. 

Adequate Funding. Rapidly sold-out financial incentives and those designed for small distributed 

generation are not adequate to trigger geothermal development. To solve this challenge, 

improving policy design for geothermal electricity-targeted policies, increasing the level of 

investment in the incentives at the state level, or increasing federal investment in R&D to lower 

the cost of technologies (thereby making the state incentives more effective at lowering the 

price) are options. 

Appropriate Audience. Large-scale geothermal projects involve stakeholders from a variety of 

sectors, including utilities, land-owners, environmentalists, policy makers from multiple 

jurisdictions, developers, and investors. Current policies may target one or more of these, but do 

not address the multiple needs of stakeholders together. Doing so is challenging, but can be done 

through coordinated policy development and implementation that targets both barrier reduction 

and financial incentives, as well as policy stability over time. 

State-Level Permitting Alterations to Remove Institutional Barriers. While this report addresses 

policy barriers in general, there are several potential improvements to current policies that could 

address institutional barriers. For example, because one of the largest barriers to geothermal 

resource development is ensuring financing and policies throughout the exploration process, it 

would be helpful for permitting procedures to require all future wells (water, gas, oil, 

geothermal, research, etc.) to require submission of well data (depths, geology, flow rates, test 

results, well logs, construction, etc.) to the state in order to remain current. The data could be fed 

into a data center that could be publically accessible and relay information in a streamlined 

fashion to developers of future projects. The DOE Geothermal Technologies Program is 

currently funding the development of a data system to house such information. 

3.2 Innovative Policies and Programs

In addition to strengthening and expanding the current suite of policies, there is a role for

emerging policies to play an increasing role in development if those policies are designed to 

optimize benefits of geothermal. Feed-in tariffs and policies that prepare the market through 

agency coordination are such policies that could have a large impact on geothermal development. 

In the past, agency coordination has played a major role in successful projects (Fleischman 

2007). Subsequently, an innovative program that draws together agencies in coordination on 

projects is also described. 

These policy and program strategies are suggested as potential reforming improvements to the 

current policy patchwork. They require further thought and examination to ensure geothermal 

resources are maximized through their implementation, but this first look provides an overview. 
27 

3.2.1 Feed-In Tariffs (FIT)

A feed-in tariff (FIT) is a fixed-price payment for renewable energy generation. FIT policies 

typically require utilities to purchase electricity from qualified renewable energy generators at a 

guaranteed price for a guaranteed period of time. This guaranteed payment is often coupled with 

guaranteed grid access. These payments can be differentiated according to the technology type, 

project size, quality of the resource, and a number of other project variables (Couture et al 2008). 

Feed-in tariffs have had a major impact on the large-scale development of renewable resources 

internationally. They have been used extensively in Europe for nearly two decades, which has 

created two of the largest markets for wind in the world. FITs have also driven investment in 

geothermal in Europe, where resource potential is not as strong as in the United States.

As a policy option, FITs have several advantages. FITs provide investor security, because the 

policy provides a guaranteed revenue stream and stable, long-term contracts. FIT policies are put 

into place over a long period of time to provide policy stability and reduce uncertainty. Yet, FITs 

are flexible in that policymakers can adjust payment levels to accurately reflect technology costs 

and avoid overpayment. To drive innovation and cost-reduction over time, FIT policies have 

built-in payment level revisions. 

The disadvantage of FIT application to geothermal projects is that the mechanism does not 

address the regulatory and R&D issues associated with geothermal. These include leasing 

barriers that exist for geothermal and exploration and technology development assistance. Due to 

the specificity of the electric markets, the appropriate implementers of FIT policies are at the 

state level (Couture et al 2008). Such policies can complement or replace state RPS policies in 

order to reach renewable energy targets established by the states. 

3.2.2 Agency Coordination 

Geothermal resources with central-generation capacity potential are often located on public lands 

that are at the intersection of multiple agency jurisdictions. In the past, agency coordination has 

played a major role in successful projects (Fleischman 2007). Policies that encourage or direct 

public agency coordination and public private partnership can create the environment for 

increased development of geothermal resources. In 2007, the BLM and USFS came together at 

the direction of the Energy Policy Act of 2005 to identify available land for hydrothermal 

resources and streamline the permitting process leasing that land to private entities for 

development. Continued public agency coordination in the identification and distribution of best 

practices for geothermal resource development is critical for the full range of technologies from 

hydrothermal to EGS. The BLM/USFS coordination resulting in the PEIS primarily directed 

toward hydrothermal technologies is an example of the beneficial impacts of coordination. 

In addition to public partnerships, public-private partnerships are also highly effective in the 

development of central generation facilities such as those from geothermal (Fleischmann 2007, 

REN21). The large time and economic costs associated with site identification, drilling, 

fracturing, and, navigation through complex regulation are eased by networks of partnerships. 

These networks can be particularly useful for emerging technologies such as EGS because the 

cost sharing aspects of partnerships defrays risks. This strategy is being used in one of the DOE 

geothermal program’s funding opportunity announcements to support the development of costshared EGS (DOE 2008). 
28 

Chapter 4. Conclusions and Next Steps

According to the 2008 USGS/USFS Geothermal Resource Potential Study (PEIS), there is a 

significant amount of identified and undiscovered hydrothermal potential in the United States. 

The potential for EGS, when the technology is through the demonstration phase, is also expected 

to be extensive (MIT 2006). The role of policy is to drive development of these resources by 

furthering technology development, reducing barriers and risk, and bringing down the price of 

development. It is clear from the experience that drove hydrothermal development in the 1970s 

and 1980s that R&D investment, public-private partnerships for the streamlining of permitting 

and project development, and consistent effective financial incentives are critical for success. 

Adapting policies to the needs of EGS as it develops will be important as well. 

Technology R&D support is still critical for the geothermal industry, both for bringing down 

costs of developing areas of known and undiscovered hydrothermal potential and for advancing 

enhanced geothermal systems (EGS) technologies, an innovative generation method with large 

potential across the United States. There is significant potential for improvement in the areas of 

exploration and resource assessment and drilling. Despite recent actions of the PEIS, 

hydrothermal barriers still exist due to leasing and permitting constraints on federal lands, where 

much of the identified resources are located. Beyond barrier reduction, geothermal needs 

consistent support from both federal and state policies. State and federal policies should 

encourage utilities to enter long-term contracts with geothermal developers, because long-term 

power purchase agreements have historically made projects viable. 

Ultimately, it is the confluence of policies, technology appropriateness, resource availability, 

financing mechanisms for appropriately timed risk reduction, and other context related factors 

that influence the development of actual geothermal resources for electricity. The current policy 

environment, while extensive, does not simultaneously repair the market failures inherent in 

geothermal development, and could be improved to better fill these gaps. Further analysis of the 

impacts of policies and incentives that target geothermal is needed so that states can choose 

appropriate mechanisms to reduce barriers and foster geothermal development. 

At the federal level, R&D investments in technology improvement, price reduction, resource 

assessment, and drilling assistance are needed. 

At the state level, expanded analysis of the potential impact of RPS and feed-in-tariffs on 

geothermal resources would provide insight into geothermal-friendly policy design, and current 

policies could be augmented through improved definitions for geothermal and required data 

feedback mechanisms to streamline future developments. 

Lastly, analysis needs to be conducted on appropriate stakeholder involvement, including the 

role of public-private partnerships, technology incubators, and local governments in supporting 

geothermal. 
29 

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GEA (Geothermal Energy Association). 2008b. “U.S. Update on Geothermal Power Production 

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33 

Appendices 

Appendix 1. Case Study: The Federal Production Tax Credit and Geothermal 

Development

In 2005, the federal production tax credit was extended to geothermal power at a level of 

1.9¢/kWh for 10 years for geothermal plants that are placed in service before the expiration of 

the credit. At that time, the credit was made available through December 31, 2006. It has since 

been extended to December 31, 2008, and more recently to December 31, 2013. 

Before the inclusion of geothermal in the technologies eligible to receive the PTC, analysis was 

conducted at NREL on the impact on cost of energy of an inflation-adjusted 1.8¢/kWh PTC for 

geothermal. The impact of the PTC can result in a larger incentive than 1.8¢/kWh, because the 

policy also increases the certainty of project viability to investors, which can lead to improved 

financing conditions. The levelized-cost-of-energy (LCOE) metric reflects this potential 

additional benefit because it incorporates the improved financing opportunities over the lifetime 

of the project. LCOE for geothermal power plants financed through project and corporate 

financing was analyzed in the presence and absence of a 10-year production tax credit for the 

generation. The key findings were that a 10-year PTC has the potential to reduce LCOE by 25% 

from 4.6 to 3.2¢/kWh for a flash-steamed project under project financing, and by 44% from 5.0 

to 2.8¢/kWh for a similar project under corporate financing (Owens 2002). 

Since its enactment, the PTC has aided developers in financing new geothermal projects in the 

western United States. In fact, some developers cite the PTC as the most important incentive 

currently available for geothermal energy (Fleischmann 2007). In Nevada, for example, 14 

geothermal plants were developed between 1984 and 1992. When economics tightened for 

geothermal development in the 1990s (due to lower avoided-costs predictions leading to less 

favorable PURPA contracts), geothermal development in Nevada dropped off. No new 

geothermal power plants were developed in the state between 1992 and 2005, the year when the 

PTC first applied to geothermal energy. Drilling in the area had already been conducted, but the 

project did not go forward until the PTC was extended to geothermal (Fleischmann 2006b). 

Because of the availability of the PTC, many new geothermal prospects are currently under 

development. However, federal legislation has followed a pattern of repeated expiration and 

short-term renewal of the PTC. Approaching expiration dates, there has been uncertainty over 

whether the PTC will be renewed. Furthermore, the PTC policy has strict placed-in-service 

requirements that prohibit developers from receiving any incentives if they miss the cut-off date. 

This short-term strategy has been detrimental to the renewables industry because costs of starting 

and stopping production and planning are high, and because developers and investors are 

discouraged from making long-term investments. 

There has been a clear boom-bust cycle in wind power investment because of uncertainty over 

the PTC. The challenge is even more defined for the geothermal industry because geothermal 

plants have construction lead times of three or more years (Gawell 2007). The fact that placedin-service deadlines are so short poses extreme risk to developers. Since the development 

timeline is lengthy, geothermal developers must scramble to meet placed-in-service requirements 

in order to receive the tax credits. The reality that the PTC is never extended for more than a few 
34 

years and that further renewal is always uncertain presents a major challenge for the industry. 

Geothermal development needs long-term planning and a consistent investment environment for 

projects to get off the ground. Industry advocates have continually urged Congress to extend 

placed-in-service deadlines for the PTC for at least 5 years (Gawell 2007). 

Appendix 2. Renewable Portfolio Standard and Geothermal Development in 

Nevada and California

While wind power has been the primary beneficiary of state RPS policies so far, geothermal is 

also getting developed and appears likely to do well in states with known geothermal resources 

and with certain RPS design considerations. RPS policies encourage utilities to enter power 

purchase agreements with geothermal developers, and long-term contracts help geothermal 

projects become economically viable. 

Certain design considerations in California and Nevada have indirectly encouraged contracts 

with geothermal power generators. First of all, RPS targets are aggressive. Cost-effective 

geothermal plants are larger in scale than the more modular renewable technologies, leading to 

their success with aggressive compliance targets. Flexibility mechanisms (e.g., banking) allow 

for Renewable Energy Credits (RECs) generated by a geothermal plant to be banked if the 

generation exceeds the scale of the annual increase in RPS targets (Wiser et al 2003). Finally, 

both states ensure equitable comparisons of different renewable sources, considering integration 

and deliverability characteristics, and call for “least-cost, best-fit” selection of renewable projects 

(Wiser et al 2003). In these two states, at least, geothermal fits that bill.

California

California’s RPS requires load-serving entities to meet a target of 20% by 2010 and 33% by 

2020. Because revisions have made the RPS increasingly stringent, development activity is set to 

increase. The Californian RPS has no provisions that specifically encourage geothermal, but how 

the RPS is implemented may implicitly encourage geothermal development (Wiser et al. 2003). 

In particular, the legislation requires utilities to select renewable resources on a “least-cost, bestfit” basis, including consideration of transmission and integration investments. Additionally, the 

legislation requires utilities to consider the delivery profile (baseload versus peaking power) of 

the resource. 

Some analysts project California’s RPS compliance scenarios with very large percentages of 

geothermal energy (Wiser et al. 2003). The sheer quantity of capacity under development 

supports the supposition that geothermal will play a large roll in reaching 33% renewable 

electricity by 2020. As of August 2008, 1,016.6 MW of geothermal capacity are in various stages 

of development in California (GEA 2008b). 

Nevada 

Nevada’s RPS mandate was enacted in 1997, and made effective in 2001. Nevada set a high 

initial target for its RPS, calling for 15% of sales to be from renewable energy by 2013. Since 

then, an amendment has made the mandate more stringent, calling for 20% by the end of 2015. 
35 

Though there are no geothermal-specific design elements, the Nevadan RPS provides indirect 

support to geothermal through (1) consideration of integration cost and reliability impacts, and 

(2) in-state renewable energy certificate trading. As in California, utilities in Nevada are bound 

by the public utilities commission consider all renewable resources and select contracts that 

combine the best combination of low-cost supply and attractive delivery profiles. Additionally, 

all in-state generation is eligible, and does not need to be interconnected to the utility. Thus RPS 

implementation has allowed for the largest utilities, Sierra Pacific Power and Nevada Power, 

which are not significantly interconnected to any geothermal resources, to contract with 

geothermal projects in northern Nevada for power. Furthermore, Nevadan geothermal resources 

are somewhat favored because out-of-state renewable generators (that may be less expensive) are 

not eligible. 

Since 2005, when the first plant was completed, four new geothermal plants have been installed 

in Nevada with combined capacity of 76 MW (GEA 2008a). Geothermal development is likely 

to continue at a fast pace supported by the state’s RPS until the requirements are met, especially 

if wind integration continues to be a concern. There are currently 42 confirmed and 3 

unconfirmed geothermal projects undergoing development in the state (GEA 2008b). Total 

capacity of these new plants is estimated to reach between 1,083 and 1,902 MW. There are 21 

early-stage projects that are securing rights, 10 projects where exploratory drilling and 

confirmation are underway, 6 projects that are securing power purchase agreements and final 

permits, and 5 projects that are currently under construction (GEA 2008b). 
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Policy Overview and Options for Maximizing the Role of Policy in 

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14. ABSTRACT (Maximum 200 Words)

Geothermal electricity production capacity has grown over time because of multiple factors, including its renewable, 

baseload, and domestic attributes; volatile and high prices for competing technologies; and policy intervention. 

Overarching federal policies, namely the Public Utilities Regulatory Policies Act (PURPA), provided certainty to project 

investors in the 1980s, leading to a boom in geothermal development. In addition to market expansion through PURPA, 

research and development policies provided an investment of public dollars toward developing technologies and 

reducing costs over time to increase the market competitiveness of geothermal electricity. Together, these efforts are 

cited as the primary policy drivers for the currently installed capacity. Informing policy decisions depends on the 

combined impacts of policies at the federal and state level on geothermal development. Identifying high-impact suites of 

policies for different contexts, and the government levels best equipped to implement them, would provide a wealth of 

information to both policy makers and project developers. 

15. SUBJECT TERMS

geothermal energy; state policy; federal policy; geothermal electricity development; enhanced geothermal systems; 

investment tax credits; financial incentives; feed-in tariffs; federal funding; state funding

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