The One Big Beautiful Bill Act (H.R. 1) will eliminate the 25D clean energy tax credit at the end of 2025, and many in the geothermal industry are concerned about what it means for business. But if planning around federal policy this year has felt a bit like navigating turbulent seas, there remain strong currents of bipartisan support at the state and utility levels. 

The state-led movement for thermal energy networks (TENs) continued its momentum in 2025. As state legislative cycles conclude, nearly one in four states have now passed some form of TEN-related legislation. Even more promising, 26 utility-owned TENs pilots progress through regulatory commissions.  

Before diving into state and utility progress, it’s worth noting that thermal energy networks are still bolstered by federal support. It’s true that the sunset of 25D will make individual geothermal heat pump investments less financially attractive to customers. But investment in neighborhood-scale solutions, like TENs, are largely guided by the Investor Tax Credit (ITC). This credit survived thanks in part to the advocacy of GeoExchange and other trade and industry members. The ITC has a long runway through 2033, and it is structured to provide bonus credits of up to 50% of an energy project’s tax liability. This means third-party developers and other tax entities are strongly incentivized to leverage the ITC for TENs.

State Legislative Report 2025: Levels of Leadership

In 2025, nine states filed bills directly related to TENs. Some states, like Washington, advanced earlier progress they’d made on TENs. Washington’s law now formalizes regulatory oversight, bringing some non-utility thermal energy companies under the auspices of the utilities commission. Meanwhile, three other states—Connecticut, Maine, and Texas—succeeded in passing TENs legislation for the first time, bringing the total number of states with TENs-related legislation to 12. 

The impact of these new laws will vary. At one end of the spectrum, Connecticut’s S.B. 4, An Act Concerning Energy Affordability, Access And Accountability, authorized the establishment of a grant and loan program to support the development of TENs, but the program didn’t receive funding appropriations this session, stalling any short-term effect.  

Maine went further. L.D. 1619, Resolve, to Establish a Commission to Study Pathways for Creating a Thermal Energy Networks Program in Maine, establishes a commission to study whether and how the state should integrate TENs into its energy infrastructure. The commission will include state representatives plus experts from labor, workforce development, and the construction industry. A report is due by December 3, 2025.  

And Texas stayed true to its reputation for going bigger. With the Governor’s signature in June, H.B. 4370 amended the Local Government Code to allow cities, water districts, and special-purpose districts to designate TENs as public improvement projects. This opens the door to new public-private partnerships and unlocks bond financing opportunities for TENs. H.B. 4370 passed unanimously in the House and Senate, compelling Texas legislators for many reasons: TENs will add resilience to the state’s energy system, bring affordable heating and cooling options to homeowners, and, crucially, employ local drillers and use technologies developed by the oil and gas industries in Texas. With this simple change to existing code language, we’re likely to see more TENs in more Texas communities.

What We’re Still Watching

The legislative game isn’t up everywhere. In Massachusetts, Governor Maura Healey’s major legislative initiative, H.4144, An Act relative to energy affordability, independence and innovation, includes several provisions to support the growth of geothermal. It would allow gas utilities to own geothermal loops that serve just one customer, such as a hospital or university, making installation more financially viable for these customers. It would also allow gas utilities to partner with third parties to develop TENs through lease agreements. And it would establish labor protections for TENs on public land or using public funds. In short, it would carve out a permanent place for geothermal within Massachusetts’ economy and regulatory framework. 

This is not the only bill that addresses geothermal in Massachusetts, which operates on a two-year legislative cycle. S.2249, An Act Relative to a Tactical Transition to Affordable, Clean Thermal Energy, would require gas utilities to gradually reduce how much of their recoverable revenue they spend on replacing gas pipelines, while increasing spending on TENs (or retiring and repairing existing gas infrastructure). It would also require gas and electric utilities that share territory to file an annual “joint tactical thermal transition plan” with the Department of Public Utilities. Meanwhile, HD.0412, An Act relative to the protection and development of the thermal commons of the Commonwealth, would establish a legal framework recognizing ambient and anthropogenic geothermal energy as “thermal commons” held in public trust, and create a working group to design equitable policies for managing thermal commons. 

Our eyes are also on Illinois. The legislature adjourned at the end of May without progress on its major energy omnibus bill, which included language to authorize utility TENs. The legislature typically reconvenes in the fall for a short session, which could give the energy omnibus bill—and its TENs language—another shot. 

Pilots scaling up 

Policy sets the stage for thermal energy networks, but real projects in the ground are what will scale this industry and increase geothermal drilling demand. The good news is that 26 utility-led TENs pilots, also referred to as demonstration projects, now advance across eight states: Colorado, Maryland, Massachusetts, Minnesota, New Jersey, New York, Washington and Illinois. Eighteen gas and dual-fuel utilities are behind these demonstration project proposals. One pilot—Eversource Energy’s geothermal network in Framingham, Massachusetts—is already operational (it turned one year old this summer). National Grid’s geothermal network pilot in Boston is likely to break ground next. 

These pilots join the many non-utility TENs already under construction or operational in cities and campuses nationwide. But what makes utility ownership exciting is its potential to scale. If pilots succeed in winning over customers, communities, lawmakers and utility executives, we will see a regulatory paradigm shift in which gas utilities transition from distributing gas to distributing heat, including heat from geothermal sources. This could present a booming opportunity for geothermal drillers. 

This opportunity must be seized. As pilot proposals advance through regulatory comment periods in all of these states, we need sustained focus on shaping them into scalable systems. Drilling professionals, consider this an invitation—and a need—for your expertise: drillers can provide crucial insight to regulators, interested communities, and utility companies on realistic project timelines, high-quality training standards, and workforce readiness. 

What happens next

The close of most 2025 state legislative sessions is barely behind us. After a brief summer respite, state legislators and advocates will prepare their 2026 legislative agenda. More TENs legislation is expected across the country next year—an opportunity for drillers to track developments within their state legislatures and public service commissions, and to influence and shape that policy. 

What 2025 has made clear is that we’re entering a new policy phase for geothermal heat pumps, one that favors neighborhood-scale networks over house-by-house retrofits. Advocates are committed to ensuring that TENs policy reflects the realities of the field and respects the businesses and profession of geothermal drillers. As the market meets policy and grows in response, we look forward to an enriched, continued partnership with drillers to inform smart, scalable legislation that sustains opportunity from coast to coast.