Short answer: Beginning December 1, 2009 a geothermal heat pump DOES NOT have to include water heating to qualify for the tax credit. Before December 1, 2009 a geothermal heat pump DOES have to include water heating to qualify for the tax credit.
Longer answer: In order for a geothermal heat pump to qualify for the tax credit the unit must meet ENERGY STAR requirements. The ENERGY STAR requirements changed on December 1, 2009. The requirements in effect prior to December 1, 2009 required some or all of the domestic water heating be provided through the use of:
- a desuperheater
- an integrated demand water heater or
- a separately installed compressor that provides demand water heating.
On December 1, 2009 a new ENERGY STAR geothermal heat pump specification was released which removed this requirement.