About tax credit: from an interview with RR"The current US administration has done two extraordinary
things. They have offered grants to the geothermal industry of up to
30% of project expenses. We calculated that the government would give
companies as much as 27% of the capital budget with no equity
interest. At the same time, they will guarantee up to 80% of allowable
project expenditures. Now that’s interesting because if you add up 27%
and 80% it produces a rather exquisite fraction. What is more
interesting is that, in the Western United States, the government has
instituted feed-in tariffs that require utilities to pay premium
prices for alternative energy versus other sources of energy. As a
result, unleveraged internal rates of return on select geothermal
projects can exceed 20%. The industry’s cost of capital, as a function
of subsidies, could be around the 5% level. The idea of a 15%
financial margin in an operation that is effectively offering a
utility risk is extremely attractive. I don’t know how long the
federal subsidies will last. They’re slated to last about 3 ½ years
and I wonder, given budget constraints, if the popularity of
geothermal projects will allow them to continue with this level of
subsidy in the face of competing needs for money, but it certainly
makes for a very, very attractive investment opportunity."